Optimism regarding near-term business conditions fell to an all-time low in June
A survey of small business owners by the National Federation of Independent Businesses (NFIB) showed that optimism dropped 3.6 points in June to a reading of 89.5, marking the sixth straight month below the 48-year average of 98. Most economists expected the NFIB Small Business Optimism Index will reach a reading of 92.8, roughly equal to the May reading.
The survey also found that small business owners expecting better business conditions over the next six months dropped seven points to a negative net result of 61%, the lowest level recorded in the survey’s 48-year history. On the same subject : Fireworks show business upturns despite higher costs. Expectations of better business conditions have worsened each month this year.
Inflation remains a top issue for small businesses, with 34% of owners reporting it was the most important issue in operating their business, up six points from May and the highest level since 1980.
The survey also found that the percentage of homeowners who expect their sales to be higher dropped 13 points from May to a net negative 28%, in what the NFIB said was a “severe decline.”
Meanwhile, 50% of homeowners reported job openings that could not be filled. This is one point below May, but remains historically very high.
The net percentage of homeowners raising average selling prices dropped three points from May to 69%. Last year’s price-rising activity picked up, reaching levels not seen since the early 1980s, when prices soared at double-digit rates.
“Small businesses are being hurt by high inflation, which can quickly turn into deflation as the economy slows and consumers brace for a recession. They have not operated in a normalized environment since 2019 and face an uncertain future. no wonder small business optimism is so low,” said Caleb Silver, editor-in-chief of Investopedia.
