Main Street Monday – Small Business Optimism Levels Dip Slightly, Remain Near Historically High Levels Says NFIB
October 14, 2019
By Caity Witucki
According to the NFIB Small Business Optimism Index, small business optimism levels remain high despite dipping 1.3 points in September. However, the NFIB’s uncertainty index rose 2 points in September, due to the negative impact of rising tariffs.
The survey remains optimistic, indicating no sign of a recession. Rather, it predicts a continued focus on the creation of jobs, capital spending, and inventory investment.
“As more owners become unsure, caution will seep into business decisions. In addition to tariff concerns, the Fed’s decision to cut interest rates raised uncertainty,” says NFIB Chief Economist, William Dunkelberg. “Perhaps the country will indeed talk itself into a recession, but not anytime soon. The persistence of unfilled job openings and reports of a deficiency of job applicants indicate that there is still substantial economic optimism about the economy on Main Street.”
Key Takeaways from the September Index:
- Rising labor costs remained strong and fewer businesses report an increase in selling prices, down 3 points to a net 8% seasonally adjusted, helping to keep inflationary measures down.
- 25% of small businesses expected credit conditions to remain unchanged or to tighten despite measures to cut rates by the Federal Reserve. Reported credit market conditions continue to remain positive.
- 22% of small business owners reported it was a good time for expansion, down 4 points from the previous month.
- A net 9% expect better business conditions, down 3 points.
- 57% of small business owners reported capital outlays, down 2 points from last month.
- 27% reported plans for capital outlays within the next six months, down 1 point.
- Investment plans were reported as strong in manufacturing (34%), professional services (33%) and wholesale trades (32%).