August 20, 2018
By Bob Coleman
Editor, Main Street Monday
Main Street Monday – Add NFIB Survey to the List of Main Street Optimists
The good news continues for Main Street. The NFIB’s July report is the second highest ever in its monthly optimism index survey of Main Street entrepreneurs — just under the high recorded 35 years ago in 1983.
Eight out of ten components show increased optimism for expansion, expectations for rising sales and plans to increase employment. At the same time, plans surrounding existing or increased inventories declined.
Credit Markets – 32% of owners indicated all their credit needs were satisfied, while 3% of owners said their credit/borrowing needs were not met. 4% reported loans are “harder to get.” 50% said they were not interested in obtaining a loan. 32% of owners indicated borrowing on a regular basis. The average rate paid on short-term maturity loans rose to 6.3%, up 20 basis points.
Crunching the numbers:
Sales and Inventories – A net 29% of small business owners anticipate higher real sales volume. While only a net 4% of owners planned to build inventories, down 2 points from June, it’s still the thirteenth positive reading over the course of the last 21-month period.
Capital Spending – 58% of small business owners reported capital outlays. Capital expenditure numbers show 42% purchased new equipment; 25% purchased vehicles; 16% made improvements or expanded current facilities, 13% used capital for interior updates; and 6% purchased land or new buildings for future expansion.
Inflation – Seasonally-adjusted, a net 24% of owners plan price increases.
Compensation and Earnings – Higher reported worker compensation rose one point from June, or a net 32% of all small businesses. A net 22% of small businesses plan to raise compensation.
As has been the trend, a net 23% of small businesses agree the most important issue continues to center around the quality of labor. 37% of small business owners were unable to fill available positions in July, up one point from June.
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