The February NFIB Small Business Optimism report was released today, February 11. The headline of the Press Release is “Small Business Confidence Edges Up, Ever So Slightly.” The subtitle is “Main Street Still Cautious About The Future.”
The Index of Small Business Optimism increased .2 points in January to 94.1.
Here are some excerpts from the Press Release that I find particularly notable (but don’t necessarily agree with) :
Small business optimism started the year slightly up from December at 94.1 but well below the pre-recession average of 100, according to the National Federation of Independent Business’ (NFIB’s) latest index. On the positive front, owners did find a reason to be more positive about their own sales (a huge 7 point jump in positive expectations) and plan more hiring, with the strongest job creation plans since 2007. However, owners continue to find inventories “too high” and sales and earnings trends continued to deteriorate for more owners. Overall, the Index is still just treading water.
Capital Outlays. The percent of owners planning capital outlays in the next 3 to 6 months fell 2 points to 24 percent. Eight percent characterized the current period as a good time to expand facilities (down 2 points). Of those who said it was a bad time to expand (59 percent), 27 percent still blamed the political environment, suggesting that at least for these owners, Washington is preventing their spending on expansion. The net percent of owners expecting better business conditions in 6 months was a net negative 11 percent, unchanged from December. Not seasonally adjusted, 19 percent expected an improvement in business conditions (up 2 points), and 23 percent expect deterioration (down 4 points). A net 15 percent of all owners expect improved real sales volumes, up a huge 7 points, a favorable sign. Overall, it looks like “maintenance mode”, no breakout in spending on the horizon based on these expectations with the exception of expected real sales.
Here is a chart of the NFIB Small Business Optimism chart, as seen in the February 11 Doug Short post titled “Small Business Sentiment: A Fractional Improvement, but ‘Losing Steam’“ :
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1799.84 as this post is written