Small business optimism is that the latest NFIB SME optimism index encourages signals for the economy. The index rose to 100.8 points to 0.5 points in August, which increased almost 3 points in an average of 98 in 52. This positive change shows the elasticity of the small business sector compared to the background of changing economic feelings.
Major results and meaning
The optimism of small business owners is mainly led by improving expectations for actual sales. 12%of the notable owners are expected to contribute greatly to the increase in the index by increasing sales of 6 points in July. Bill Dunkelberg, the chief economist of NFIB, says: “In August, optimism has increased slightly in August, as more owners report more powerful sales expectations and profits.” But he warned that the quality of labor is still an urgent concern, citing the biggest problem in the main street.
Business health seems to be improving. In August, 14%of the owners were considered excellent in business (1 point) and 54%were considered good (2 points). On the contrary, 27%considered their business health as a process (4 points), and 4%reported poor conditions without changing the previous month.
Working list and labor market mechanics
Despite optimism, the labor market still remains a challenging environment. About 32%of the owners of SMEs have reported not being filled in July. This is important because the first opening that has not been filled for the first time since July 2020 has fallen to less than 32%.
«Labor Quality» continues to maintain a list of concerns for small business owners, reflecting continuous struggle to find skilled workers. The construction, manufacturing and transportation sectors see acute difficulties in filling the essential role, and cannot secure almost half of the construction projects.
While 15%of the owners plan to create new jobs in the next few months, the encouraging trend has a low historical intention of creating jobs. 81%of the owners emphasize the important talent gap faced by many industries, with little or no applicants who are actively hired.
Financial trend
There is a mixed signal on the financial front. The average percentage of short -term loans has decreased to the lowest 8.1%since May 2023, relieving some of the borrowing costs of business owners. But only 23%of the owners have reported that borrowing can be hesitant to pursue financing regularly over the last few months.
Interestingly, 29%of the owners reported raising employee rewards, while inflation problems are widespread. 11 %identify inflation as a major operation problem and point out the continuous pressure on the cost of input.
I am looking for it in the future
Small business owners are generally planned for the next three months. Pure 26%tries to increase the price to slightly decrease than July, and the proportion of owners who raise the average selling price also reduces the larger economic hesitation.
Despite these tasks, more than half (54%) of small business owners pointed out that the interruption of the supply chain is affecting the operation, but it indicates that this is more notable than before.
Ultimately, the NFIB Small Business OpMentism Index emphasizes the complex mixing of optimism and continuous challenge, so small business owners must critically evaluate their operations. The main takeout of this month’s survey is clear. Although there are signs of improvement in sales expectations and business health, significant obstacles are still in progress in the labor market and inflation pressure.
More detailed insights can see the results of a complete NFIB survey. here.
