Small businesses are feeling optimistic about future business conditions
WASHINGTON, D.C. (August 13, 2024) – NFIB Research Center Executive Director Holly Wade joined Brad Smith of Yahoo! Finance to discuss the state of the small business economy and optimism levels on Main Street.
Wade analyzed data from NFIB’s July SBET survey to show how changing economic circumstances and easing headwinds are improving small business owners’ expectations for future business conditions.
Watch Wade’s interview here: https://finance.yahoo.com/video/small-business-optimism-rising-indicates-165049965.html
“The Index did jump 2.2 last month, which was a great sign that things are easing up for small businesses across the country. Especially their outlook for business conditions. That improved 18 points from June. [This was] a great signal that small businesses’ headwinds – that we’ve been talking about for months now – are starting to ease up. Sales expectations going forward improved, those planning to increase compensation fell a bit, and those that are increasing prices fell – and also those planning to increase prices. So, all of those headwinds, the inflation picture, even though it is still the single most important problem for one in four small business owners, those pressures have eased. And that’s a great sign for small businesses.
“Last month, there was a higher number of those that said they expect sales to increase. They’re competing with their neighboring businesses, so they’re having to adjust those prices accordingly to keep their customers. We all know that consumers, and also businesses, are having a bit of price fatigue. They are not enjoying the last couple of years of having to increase prices more than they have before, and more frequently than they have before. So, easing off those pressures has relieved a lot of stress amongst small business owners, and they’re expecting sales to even improve over the next three months.
“We’re looking at still record level highs of unfilled job openings that have been very elevated for several years. Those remain elevated, so that’s a good sign that the employment sector of small businesses is still strong. As far as capital spending goes, it has been pretty tempered over the last couple of years…[Small business owners are] hesitating a bit on whether to make those big expenditures and maybe waiting a couple of months to see if the cost of financing starts to ease up a bit and maybe becomes more affordable for them.”
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