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NFIB: Small Business Optimism Declines in July

  • National Federation of Independent Business releases its latest monthly report on small business optimism
  • Optimism wavers in July amid ongoing labor and supply challenges
  • A record high 49 percent of respondents said they have unfilled job openings at their company

Summary by Dirk Langeveld

Small business owners were less optimistic about economic trends in July as supply and labor challenges continued to weigh on them, according to the latest monthly report by the National Federation of Independent Business.

NFIB’s Small Business Optimism Index fell 2.8 points to 99.7, erasing most of the gain made in June. The organization said the report was “troubling” after economic progress earlier in the year, and suggested that business owners’ confidence in the economy may be wavering due to ongoing pressures.

The share of respondents expecting better sales in the coming three months was a net negative 4 percent, down from a net positive 7 percent in June. A net negative share of 20 percent expect better business conditions in the next six months.

  • A record high 49 percent of respondents said they have unfilled job openings at their company
  • 31 percent reported receiving few qualified applicants for the jobs they were trying to fill, and 26 percent said they received no qualifying applicants
  • 38 percent said they were planning to raise compensation to attract workers, down slightly from June’s record high share of 39 percent
  • 27 percent said they expect to create new jobs in the next three months
  • 30 percent said supply chain disruptions have had a significant impact on their business, with a record high net share of 12 percent saying they consider their inventory levels to be too low; NFIB suggests that a replenishment of these inventories could drive economic growth later in the final months of 2021
  • The report does not reference the new wave of COVID-19 infections driven by the virus’s Delta variant, but NFIB says it expects COVID-19 disruptions to continue into 2022

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