June 2018 National Federation of Independent Business
Submitted by Atlas Indicators Investment Advisors on July 17th, 2018
Small business confidence remains high in the U.S. according to the National Federation of Independent Business (NFIB). Their optimism index gave back just 0.6 points in June after reaching its second highest reading ever in May. Despite the monthly setback, this reading of 107.2 is the sixth best tally in the survey’s 45-year history.
The labor market remains strong with this cohort. Owners reported adding 0.19 workers per firm on average; this is nearly unchanged from a month ago and a strong tally. Those adding to payrolls (15 percent) outweighed the number of companies lightening their staff (12 percent); one note of caution, there was a four-percentage point increase from eight percent in the number of firms shrinking their staffing. Those who were let go from a small business might find employment at the many firms hiring; sixty-three percent reported hiring or trying to hire in June.
Capital outlays fell some but remained strong. Fifty-nine percent of firms (down 3 percentage points) reported spending money on equipment and other means of production. As firms invest in items like new equipment, software, vehicles, and improved facilities, our economy’s chances of improving productivity are greater. Plans for further outlays are also fairly robust as 29 percent of firms indicate they’ll spend more in the next few months.
Credit needs seem to be mostly met. Just three percent of owners reported their borrowing requirements were not satisfied, and only two percent reported financing as their top business problem. Part of these low numbers is due to a high percentage of firms (54 percent) reporting they were not interested in a loan at this time.
Main Street is rarely represented directly in economic indicators, but the NFIB is an exception. Readings from this release are some of the strongest of all the indicators Atlas watches. From the vantage point of this optimism index, small businesses are excited about the economy and expect even greater times ahead based on their anticipated capital outlays.
