Small Business Poll: Improved Pulse Rate but Patient Still in the ICU

July 11, 2023

Small Business Poll: Improved Pulse Rate but Patient Still in the ICU

FOR IMMEDIATE RELEASE Contact: John Kabateck, California State Director, John@Kabstrat.com or Tony Malandra, Senior Media Manager, Anthony.Malandra@nfib.org SACRAMENTO, Calif., July 11, 2023—The latest poll results from the nation’s bellwether measurement of the small-business economy were released today and showed a tiny improvement in the outlook among Main Street entrepreneurs of the nation. “What the poll showed is a patient with an improved pulse rate but still very much in the intensive care unit,” said John Kabateck, California state director for the National Federation of Independent Business (NFIB), which conducts the monthly survey. “It’s a national snapshot not broken down by state, but if it were, I believe California small-business owners would be in a state of greater despair given what their State Legislature wants to do. Progressive bills currently being voted on in the State Capitol, including yet another costly paid leave mandate, a $25 minimum wage, and a measure requiring all businesses to unionize, are forcing most of our No. 1 job-creators to consider being taken off life support. The only improved outlook for them will be from July 14 to August 14 when the Legislature is in summer recess.” On the second Tuesday of every month, NFIB releases the results from its latest Small Business Economic Trends (SBET) report (aka the Optimism Index), the gold standard measurement of America’s small business economy, used by the Federal Reserve, Congressional leaders, administration officials, and state legislatures across the nation. Sixty percent of NFIB members employ one to five people and report gross sales of about $500,000 a year. Now in its 50th year, “the SBET’s primary value is anticipating short-run fluctuations in economic activity,” according to this one-page history of it. “The SBET is one of the few archival data sets on small businesses, particularly when research questions address business operations rather than opinions.” Key findings from today’s report show:

The Optimism Index increased 1.6 points in June to 91.0–however, it is the 18th consecutive month below the 49-year average of 98.

Inflation and labor quality tied as the top small business concerns with 24% of owners reporting each as their single most important problem.

The net percent of owners raising average selling prices decreased three points to a net 29% seasonally adjusted, still a very inflationary level but trending down. This is the lowest reading since March 2021.

Small business owners expecting better business conditions over the next six months improved 10 points from May to a net negative 40%, 21 percentage points better than last June’s reading of a net negative 61%.

From NFIB Chief Economist Bill Dunkelberg “Halfway through the year, small business owners remain very pessimistic about future business conditions and their sales prospects. Inflation and labor shortages continue to be great challenges for small businesses. Owners are still raising selling prices at an inflationary level to try to pass on higher inventory, labor, and energy costs.” Keep up with the latest on California small-business news at www.nfib.com/california or by following NFIB on Twitter @NFIB_CA or on Facebook @NFIB.CA. ### For 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com. NFIB California 915 L. Street, Suite C-411 Sacramento, CA 95814 916-448-9904 www.nfib.com/CATwitter: @NFIB_CA Facebook: @NFIB.CA