The latest survey from the NFIB finds small business owners losing confidence in the economy.
“Small-business owners have seen little to encourage them about growth,” said NFIB Chief Economist William Dunkelberg, “but there are few signs that the economy is ready to slip into an actual recession.”
Some highlights from this month’s survey”
– Hiring plans among small firms faded some in June, but job openings are historically high and unemployment remains low. Seasonally adjusted, job growth was flat compared to May. However, unfilled positions were reported to actually be a bit higher in June and still a concern for business owners. Of concern for future growth is the finding that fewer small business owners have plans for new job creation.
– Capital spending and future plans for capital outlays have both weakened, indicating a more cautious stance. This seems to be tied to a view that conditions will likely not improve over the next six months.
– Small business owners are taking care to manage inventories, with only 5 percent of owners reporting a gain in inventory stocks.
– Sales seem to be flat, with about as many owners reporting increases in sales as those reporting decreases in sales. But inflation is still a worry as more report increasing prices (31%) than report decreasing prices (13%). Profits have also gotten weaker for most small businesses. Any increase in prices is being eaten up by increasing labor costs. Another factor that causes me concerns about inflation.
– Finally, borrowing is down, which is yet one more sign of caution among small business owners.
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