Inflation remained the number one operating issue for small business owners in July.
WASHINGTON, D.C. (August 13, 2024) – The NFIB Small Business Optimism Index rose 2.2 points in July to 93.7, the highest reading since February 2022. However, this marks the 31st consecutive month below the 50-year average of 98. Inflation remains the top issue among small business owners, with 25% reporting it as their single most important problem in operating their business, up four points from June.
“Despite this increase in optimism, the road ahead remains tough for the nation’s small business owners,” said NFIB Chief Economist Bill Dunkelberg. “Cost pressures, especially labor costs, continue to plague small business operations, impacting their bottom line. Owners are heading towards unpredictable months ahead, not knowing how future economic conditions or government policies will impact them.”
Key findings include:
- Seasonally adjusted, a net 33% reported raising compensation in July, down five points from June and the lowest reading since April 2021.
- A net 2% (seasonally adjusted) of owners plan inventory investment in the coming months, up four points from June. The last time inventory investment plans were positive was in October 2022.
- The net percent of owners expecting higher real sales volumes rose four points in July to a net negative 9% (seasonally adjusted), the highest reading of this year.
- The net percent of owners raising average selling prices fell five points from June to a seasonally adjusted net 22%.
- Seasonally adjusted, a net 24% plan price hikes in July (down two points). This is the lowest reading since April 2023.
- Thirty-eight percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up one point from June.
As reported in NFIB’s monthly jobs report, a seasonally adjusted 38% of all small business owners reported job openings they could not fill during their current period—up one point from June. Of the 57% of owners hiring or trying to hire in July, 86% reported few or no qualified applicants for open positions.
Fifty-four percent of owners reported capital outlays over the last six months—up two points from June—with expenditures including new equipment (36%), vehicles (22%), and improved or expanded facilities (15%). Ten percent spent on new fixtures and furniture while seven percent acquired new buildings or land for expansion. Twenty-three percent (seasonally adjusted) plan capital outlays within six months—a figure unchanged for three consecutive months.
A net negative sixteen percent of all owners (seasonally adjusted) reported higher nominal sales over three months. Meanwhile, those expecting higher real sales volumes rose four points to a net negative nine percent—the highest reading this year.
The net percentage reporting inventory gains fell six points to a net negative nine percent—the lowest since August 2020—with eleven percent unadjusted increases and seventeen percent reductions.
A net negative four percent viewed current inventory stocks as "too low"—down two points from June—and two percent plan inventory investments within upcoming months—up four points from June—the first positive outlook since October 2022.
The frequency of reports showing positive profit trends saw a slight decline with a net negative thirty percent—one point worse than June figures—with weak sales cited by thirty-three percent as contributing factor along with rising material costs (17%), labor costs (11%), and lower selling prices (10%).
In financing matters: Two-percent mentioned unmet borrowing needs; twenty-five-percent confirmed meeting credit needs; sixty-two-percent showed disinterest toward loans; while six-percent found loans harder compared previous attempts—a minor decrease shown by only three-percent naming financing top issue compared prior month drop-point figure indicated same trend during previous periods surveyed altogether ultimately leading such concerns weighed least impactful according aggregated data summarized underlined statistics evaluated comprehensive analysis detailing situational context accurately reflecting broader economic environment experienced operationally affected stakeholders therein covered entirety review presented extensively comprehensively concisely succinctly concluding detailed insight outlined above illustrating key takeaways derived observed tendencies indicating persistent challenges faced domestically impacting prevailing sentiment observed persistently nationwide analyzed periodically documented historically compiled accordingly generating informative understanding reader audience effectively conveying essential information captured discussed summarizing pivotal aspects revealed substantively contextualized encompassing overall evaluation finalized decisively emphasizing critical importance noted issues identified correspondingly therein addressed cumulatively conclusively signifying implications consequently recognized inferred conclusively acknowledged end
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