New NFIB Survey Finds Fears That Current Challenges Will Continue
The NFIB Research Center recently released the July Small Business Optimism Index – a widely respected gauge of small business attitudes nationwide. The latest survey found that only 25% of owners think there will be better business conditions within the next six months.
“Small businesses are clearly still struggling from the coronavirus pandemic, whether through continued shutdowns, lower sales, higher costs, or troubles hiring,” said Bill Dunkelberg, NFIB’s chief economist. “Now is the time for Congress to give Main Street the support and reforms it needs to bounce back and rebuild the American economy.”
Overall, small businesses owners’ expectations for the future remain near their historical average at 98.8 – down 1.8 points from June. The NFIB Uncertainty Index increased 7 points to 88.
Other key findings include:
- Real sales expectations in the next 3 months decreased 8 points to a net 5%.
- The percent of owners thinking it’s a good time to expand decreased 2 points to 11% of owners.
- Earnings trends over the past 3 months improved 3 points to a net negative 32%.
- Job creation plans increased 2 points to a net 18%.
Small businesses are doing what they can to move forward. As reported in NFIB’s most recent jobs report, a seasonally adjusted net 18% plan to create new jobs in the next 3 months, up 2 points from June and 17 percentage points above April. Owners are interested in hiring but many workers may not be ready to return.
Nearly half of owners reported capital outlays in the last six months. Of those making expenditures, 33% reported spending on new equipment, 21% acquired vehicles, and 13% improved or expanded facilities. Five percent acquired new buildings or land for expansion and 10% spent money for new fixtures and furniture. Twenty-six percent of owners are planning capital outlays in the next few months.
Major problems continue to persist for Main Street firms.
A net negative 28% of all owners reported higher nominal sales in the past 3 months. Even with states reopening, sales are often lower due to business restrictions, social distancing requirements, and a still-reduced willingness of consumers to go out and mingle with the general population.
Additionally, twenty-one percent of owners selected “finding qualified labor” as their top business problem, with 37% in construction.
“Small businesses want to get back to business as usual,” said Bill Dunkelberg. “While the outlook for the next few months isn’t great, Congress can take action to brighten the picture. Quicker action will lead to better results, benefitting the millions of small businesses that are the cornerstone of the economy.”
More findings from the July Small Business Optimism Index are available at NFIB.com