The NFIB Small Business Optimism Index increased by three points in May to 98.8, slightly above the 51-year average of 98.
Expected business conditions and sales expectations contributed the most to the rise in the index. The Uncertainty Index rose two points from April to 94. Eighteen percent of small business owners reported taxes as their single most important problem, up two points from April and ranking as the top problem. The last time taxes were ranked as the top single most important problem was in December 2020.
“Wisconsin small business owners are feeling more optimistic about the future, with increased investment plans,” said NFIB Wisconsin State Director Luke Bacher. “However, the ongoing issues with taxation and labor quality are still top of mind for many.”
Key findings include:
- A net 1% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in May, up 7 points from April and the highest reading since August 2022. This was the largest monthly increase in the survey’s history.
- The net percent of owners expecting better business conditions rose 10 points from April to a net 25% (seasonally adjusted).
- The net percent of owners expecting higher real sales volumes rose 11 points from April to a net 10% (seasonally adjusted). This component contributed the most to the Optimism Index’s improvement.
- Twenty-two percent (seasonally adjusted) plan capital outlays in the next six months, up four points from April and the highest reading of this year.
- The percent of small business owners reporting labor quality as the single most important problem for business fell three points from April to 16%.
- Fourteen percent of owners reported that inflation was their single most important problem in operating their business, unchanged from April.
When asked to rate the overall health of their business, 14% reported excellent (up one point), and 55% reported good (down one point). Twenty-eight percent reported the health of their business was fair (up one point) and 4% reported poor (unchanged).
As reported in NFIB’s monthly jobs report, a seasonally adjusted 34% of all small business owners reported job openings they could not fill in May, unchanged from April. Of the 55% of owners hiring or trying to hire in May, 86% reported few or no qualified applicants for the positions they were trying to fill. A seasonally adjusted net 12% of owners plan to create new jobs in the next three months, down one point from April.
Seasonally adjusted, a net 26% reported raising compensation, down seven points from April. A seasonally adjusted net 20% plan to raise compensation in the next three months, up three points from April.
Fifty-six percent of owners reported capital outlays in the last six months, down two points from April and the lowest reading of this year.
Of those making expenditures, 40% reported spending on new equipment, 26% acquired vehicles, and 15% improved or expanded facilities. Ten percent spent money on new fixtures and furniture and 5% acquired new buildings or land for expansion.
