The NFIB Small Business Optimism Index rose 1.7 points in July to 100.3, slightly above the 52-year average of 98. Contributing most to the rise in the index were respondents’ reports of better business conditions and a promising environment for expansion.Â
In contrast to the Optimism Index, the Uncertainty Index increased by eight points from June to 97. Twenty-one percent of small business owners reported labor quality as their single most important problem, up five points from June and ranking as the top problem.
Key findings include:
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A notable improvement in overall business health, with 13% of respondents reporting excellent health (up five points), 52% reporting good health (up three points), 31% reporting fair health (down four points) and 4% reporting poor health (down three points);
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A one-point rise in the percent of small business owners reporting poor sales as their top business problem to 11% — the highest level of poor sales since February 2021;
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An 14-point increase from June in the net percent of owners expecting better business conditions to a net 36% (seasonally adjusted) — comfortably above the historical average;
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Sixteen percent (seasonally adjusted) reporting in July that it is a good time to expand their business, up five points from June;
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Eleven percent of owners reporting that inflation was their single most important problem in operating their business, unchanged from June’s lowest reading since September 2021;
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A one-point drop from June in the net percent of owners expecting higher real sales volumes to a net 6% (seasonally adjusted); and
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Twenty-two percent (seasonally adjusted) planning capital outlays in the next six months, up one point from June, but seven points below the historical average of 29%.
