The National Federation of Independent Business (NFIB) this morning reported a rise of 0.6 points in its small business optimism index, from 93.5 in June to 94.1 in July. In May the index reached 94.4, its second-highest reading since December 2007.
Of the 10 index components, the NFIB recorded gains in six. Readings in capital spending plans and boosting inventories were flat in July, while expectations for improvement in the economy and improved credit conditions were lower.
The NFIB’s chief economist said:
The [July] level is still well below the average reading of 100 in the prior 35 years and still half a point below the December 2007 reading. Unfortunately, nothing is being done to allay the most pressing concerns identified by job creators -- dealing with rising health insurance costs, regulations, tax complexity, energy costs and general economic uncertainty.
Sales were reportedly down a net 7% in July, up one point from June. Expectations rose by 2% to a total of 7% for sales increases during the next three months.
Some 4% of small business owners plan to raise prices in the next three months.
The biggest drags on independent businesses according to the survey were taxes and regulations and red tape (both noted by 21% of respondents) and poor sales (noted by 16%).