10-25-19 | Economic News

Small Business Optimism Fades

Owners Outlook on Economy, Spending and Hiring Slip in Latest Survey

Of the small businesses reportedly projecting to make a capital outlay in the next 3 to 6 months, only 18% plan to improve buildings or land and just 4% plan to purchase additional buildings or land.

Down from its cycle high of 108.8 a year ago, the Small Business Optimism Index put out by the National Federation of Independent Business fell 1.6 points to come in at 103.1 in August; though this reading is about average for the year and still points to solid growth.


Business owners are still feeling good about present conditions as reported sales and earnings are still solid, jobs are being added and financing is not difficult to secure for the most part.

However, future expectations took a hit in the latest report. The percentage of business owners expecting improvement over the next six months dropped 8 points to 12%, the largest decrease since January. Prospects for increasing staff over the next six months fell 1 point to 20; not terrible but still six points off its cycle high one year ago. The score for anticipating a capital expenditure during the next 3 to 6 months remained unchanged at 28 but is down 5 points from its cycle high reached again one year ago.

"Given the uncertainty about the trade standoff and global economy, we are not surprised small business optimism pulled back a notch," stated the Wells Fargo Economics Group. "Concerns about the global economy have subsided a bit this month and stock prices have rebounded. We expect small business optimism to do the same next month."


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