Small Business Optimism Improves in Anticipation of Better Economic Outlook

The Small Business Optimism Index increased 6.2 points in June to 100.6 with eight of the 10 components improving and two declining. Owners anticipate improving sales as the economy continues to re-open with sales expectations rebounding to a net 13% after April’s lowest reading in survey history (a net negative 42%). Small business owners continue to be optimistic about future business conditions and indicate they expect the recession to be short-lived.

Other key findings from the survey include:
The NFIB Uncertainty Index decreased one point in June to 81.

Earnings trends over the past 3 months declined to a net negative 35%, the lowest reading since March 2010.

The percent of owners who think now is a good time to expand improved 8 points to 13% of owners.
Job creation plans increased 8 points to a net 16%.

Down from May, 48% of owners reported capital outlays in the next 6 months, the lowest level since December 2010. Of those making expenditures, 32% reported spending on new equipment (down 3 points), 18% acquired vehicles (down 2 points), and 14% improved or expanded facilities. Five percent acquired new buildings or land for expansion and 9% spent money for new fixtures and furniture.

Twenty-two percent plan capital outlays in the next few months, up 2 points from May. Plans are trending up but remain at recession levels.