The June NFIB Small Business Optimism report was released yesterday, June 11. The headline of the Press Release is “Small-Business Confidence Edges Up, Reaches May 2012 Level.” The subtitle is “Not Much Progress For a Recovery.”
The Index of Small Business Optimism increased 2.3 points in May to 94.4.
Here are some excerpts from the Press Release that I find particularly notable (but don’t necessarily agree with) :
While May’s reading is the second highest since the recession started December 2007, the Index does not signal strong economic growth for the sector.
Owners were asked to identify their top business problem: 24 percent cited taxes, 23 percent cited regulations and red tape, 16 percent cited weak sales and 2 percent reported financing/access to credit.
Sales. The net percent of all owners* reporting higher nominal sales in the past three months compared to the prior three months was unchanged at a negative 4 percent. While this is the best reading in nearly a year, there are still more firms reporting declines than gains. The net percent of owners expecting higher real sales volumes rose 4 points to 8 percent of all owners. Sales expectations are trending better, but are still historically weak.
Credit Markets. Credit continues to be a non-issue for small employers, only 5 percent of whom say that all their credit needs were not met in May. This is down 1 point from April and the lowest reading since February 2008. Twenty-eight (28) percent of owners surveyed reported that all their credit needs were met last month, and 53 percent explicitly said they did not want a loan (67 percent including those who did not answer the question, presumably uninterested in borrowing as well).
Inflation. The net percent of owners raising selling prices in May was 2 percent, down 1 point from April. Sixteen (16) percent of NFIB owners reported reducing their average selling prices in the past three months, and increase of 1 point, and 19 percent of owners surveyed reported price increases (down 1 point). As for prospective price increases, 17 percent of small employers plan to raise average prices in the next few months (down 4 points), and 3 percent plan price reductions. Seasonally adjusted, a net 15 percent plan price hikes, down 3 points.
Here is a chart of the NFIB Small Business Optimism chart, as seen in Doug Short’s June 11 post titled “Small Business Sentiment: Highest Level Since May 2012” :
(click on chart to enlarge image)
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1626.13 as this post is written