July 2018 National Federation of Independent Businesses

Small business optimism continued riding high as the summer of 2018 heated up.  The optimism index from the National Federation of Independent Businesses reached its second highest level ever in July, rising to 107.9 from 107.2 in June; July 1983 (with a reading of 108.0) is the only period with a higher count in the survey’s 45-year history.

Jobs continue to lead the survey.  New records were set in terms of owners reporting employment creation and those with roles to fill.  Currently, a net 23 percent of respondents plan to increase employment, up three percentage points versus June.  A net thirty-seven percent of companies indicated they had positions which they could not fill in July, up one point from a month earlier.

Expectations are elevated as well. Rising two percentage points, a net 35 percent of owners anticipate the economy will improve.  Likewise, the net figure of small business expecting improving real sales jumped three percentage points to 29 percent.

There is an increase in those believing now is a good time to spend money as well.  Fifty-eight percent reported capital outlays.  While this is down one point from June, it is a strong reading.  Of those making expenditures, a plurality of them (42 percent) acquired new equipment.  Twenty-five percent purchased vehicles, and 16 percent improved or expanded facilities.

Small business continues believing in the strength of the American economy.  Main Street appears happy with the economic environment as it seems poised to continue supporting this expansion. Hopefully such enthusiasm is contagious and larger firms buttress the nation’s growth as well.