- National Federation of Independent Business finds slight increase in small business optimism in August
- Uptick comes despite headwinds such as hiring challenges and uncertainty about future economic strength
- Business owners generally more likely to expect to hire workers, make capital expenditures, and see higher real sales
Summary by Dirk Langeveld
Small business owners were slightly more optimistic in August despite ongoing hiring challenges and uncertainty about future economic conditions, according to the National Federation of Independent Business.
NFIB’s latest Small Business Optimism Index stood at 100.1, up 0.4 points from August. Business owners were generally more likely to commit to hiring workers, investing in capital improvements, increasing their inventories, and expecting real sales to improve, but less likely to foresee better economic conditions or think it was a good time to expand their business.
- A net negative share of 28 percent believe economic conditions will strengthen in six months, down 16 points in the past two months to its lowest point since January 2013
- Half of all respondents said they have job openings they haven’t been able to fill, up one point from July and the second consecutive month of record high hiring challenges; the historic average is 22 percent
- 28 percent named labor quality as their top challenge, followed by 10 percent identifying labor costs
- A record net share of 41 percent said they’ve increased compensation for workers, with a net share of 26 percent planning to raise compensation
- A “historically weak” share of 55 percent said they’ve made capital expenditures, with a similar diminished share of 30 percent expecting to make capital expenditures in the next few months
- Just 13 percent said they haven’t been affected by supply chain issues, with 37 percent saying they’ve had a significant effect on their company and 29 percent reporting a moderate effect
- A net share of 11 percent business owners said that their inventory stocks are too low and that they plan to invest in building up their inventory
- A net share of 49 percent said they have increased their average prices, with this trend most common in wholesale, retail, and manufacturing