Small business optimism index rose slightly in April
Washington DC (May 14, 2024) – NFIB Small Business Optimism Index In April, the index rose 1.2 points to 89.7, marking the first increase this year, but the first increase in 28 years.th 22% of business owners say inflation is the single most important issue for their business, down 3 points from March, but still the biggest issue for small business owners .
“Cost pressures remain the biggest issue for small business owners, including those who are increasing compensation to historically high levels to retain and attract employees,” he said. Bill Dunkelberg, NFIB Chief Economist. “Overall, small business owners have historically remained very pessimistic and continue to navigate these challenges. Owners are dealing with increasing levels of uncertainty, but customers are We will continue to do what we do best: serve you.”
Key findings include:
- The net percentage of owners expecting real sales to increase further increased by 6 percentage points from March to a net negative 12% (seasonally adjusted).
- A seasonally adjusted net 12% of business owners say they plan to create new jobs in the next three months, up 1 percentage point from March, the lowest level since May 2020.
- A net 26% (seasonally adjusted) of owners plan to raise prices in April, down 7 percentage points and the lowest level since last April.
- 40% of all business owners (seasonally adjusted) said they had jobs they were unable to fill this quarter, an increase of 3 points from March and the lowest level since January 2021.
- The net percentage of owners who increased their average sales price was 25%, a seasonally adjusted decrease of 3 percentage points from March.
As reported in NFIB's Monthly Employment Report, 56% of owners reported hiring or trying to hire in April, and 91% of owners hiring or trying to hire Reported that there were few or no qualified applicants for the position.
Fifty-six percent of owners reported capital expenditures in the past six months, unchanged from March. Of those spending, 38% reported spending on new equipment, 24% acquired a vehicle, and 16% improved or expanded their equipment. 11% spent money on new fixtures and furniture, and 6% acquired new buildings or land for expansion. 22% (seasonally adjusted) plan to make capital investments in the coming months.
13% (seasonally adjusted) of all owners reported an increase in nominal sales over the past three months. The net percentage of owners expecting real sales volume growth increased by 6 percentage points to a net negative 12% (seasonally adjusted).
The net percentage of owners reporting inventory increases increased by 1 point to a net negative 6%. When not seasonally adjusted, 12% reported an increase in inventory and 17% reported a decrease in inventory. As of April, owners who believed current stock inventories were “too low” had a net negative 4% (seasonally adjusted). Owners planning to invest in inventory in the coming months are down a net 6%.
The net percentage of owners who increased their average sales price was 25%, a seasonally adjusted decrease of 3 percentage points from March. 22% of owners said inflation was the single most important issue in running their business, down 3 points from March.
13% of owners reported a low average sales price and 41% reported a high average sales price. The industries with the highest price increases were financial (up 54%, down 7%), retail (up 49%, down 8%), construction (up 48%, down 7%), and manufacturing (up 40%). , down 7%). ), wholesale (40% higher, 10% lower) sector. On a seasonally adjusted basis, a net 26% of owners plan to increase their prices in April.
On a seasonally adjusted basis, a net 38% reported increasing compensation in April. A net 21% (seasonally adjusted) of owners plan to increase compensation over the next three months, unchanged from March.
11% of business owners cited labor costs as their business' biggest problem, up one point from March and two points below the high of 13% set in December 2021. 19% say quality of labor is the biggest issue for their business, which continues to lag behind inflation. The biggest problem.
The frequency with which positive earnings trends were reported was a net negative 27% (seasonally adjusted), an improvement of 2 points from March, but still very bad. Among owners who reported a decrease in profits, 33% cited poor sales, 14% cited increased material costs, 13% cited normal seasonal fluctuations, and 12% cited labor costs. Among owners who reported an increase in profits, 43% cited sales volume, 26% cited normal seasonal fluctuations, and 11% cited increased sales prices.
3% of owners said all their borrowing needs were not met, an increase of 1 percentage point from March. 28% of owners said all their financing needs were met, and 60% said they were not interested in financing. A net 8% said it was harder to get a loan than their last loan.
4% of owners said financing was their biggest business challenge in April. A net 21% of owners said they paid a higher interest rate on their most recent loan, an increase of 4 percentage points from March.
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