National Federation of Independent Businesses August Survey Results

Small Business Optimism Index

The Index for July rose slightly to 101.1 (1986=100). Second quarter GDP growth was estimated at 3.4 percent, with contributions from all major components. The NFIB Index
anticipated a stronger reading, so revisions to GDP growth will likely be positive. Labor markets tightened a bit and more firms reported raising compensation than raised prices. Nonetheless, profit trends improved as the number of firms reporting rising profits gained relative to those
reporting declines.

Labor Markets

Nineteen (19) percent of the owners reported increasing employment in July, and eight percent reported workforce reductions, adding a net 0.5 employees per firm. Seasonally adjusted, 17 percent reported increased employment and ten reported reductions averaging a net 0.2 employees added per firm. Fifty-two (52) percent hired or tried to hire one or more workers. Seventy-nine (79) percent of these owners reported few or no qualified applicants for the positions that they were trying to fill. Overall, hiring plans were solid in all industry groups. Construction was strongest with 23 percent planning to increase employment and nine percent
planning job reductions. Firms in finance, insurance and real estate followed.

Capital Spending

The frequency of reported capital outlays over the past 6 months was unchanged at 61 percent of all firms, a solid figure. Forty-six (46) percent reported spending on new equipment; 24 percent acquired vehicles; and, 13 percent improved or expanded their facilities. Eight (8) percent acquired new buildings or land for expansion and 16 percent spent money for new fixtures, furniture etc. The frequency of reported outlays was higher in all categories, and overall, the capital spending picture remains solid. The median outlay was about $27,000, substantial when aggregated over millions of firms and well ahead of June numbers.