The Small Business Optimism Index posted its sixth highest reading ever for the month of June, at 107.2, down 0.6 from May. Since December 2016, following the election of Donald Trump, the Index has averaged “an unprecedented” 105.4.
That’s far higher than the 45-year average of 98 and rivaling the all-time high of 108.0 in July 1983.
“Small business owners continue to report astounding optimism as they celebrate strong sales, the creation of jobs, and more profits,” said NFIB President and CEO Juanita Duggan. “The first six months of the year have been very good to small business thanks to tax cuts, regulatory reform, and policies that help them grow.”
A net 10% of all small business owners (seasonally adjusted) reported higher nominal sales in the past 3 months juxtaposed to the previous 3 months. While that’s down 5 points in June, it’s still one of the strongest readings in years.
This is the 7th consecutive strong month of reported sales gains, which were most frequent in manufacturing and the wholesale trades. As People’s Pundit Daily (PPD) previously reported, manufacturing employment hit a 9 1/2-year high in June.
“There was a fractional decline in the Index from May to June, statistically insignificant,” said NFIB Chief Economist Bill Dunkelberg. “Small business owners are already seeing their bottom lines grow due to strong sales and regulatory relief and the new tax law is expected to push profits higher as the year progresses.”
A solid 63% of owners reported hiring or trying to hire, which is an increase of 5 points from last month and the highest level since September 1999. However, small businesses continue to sound the alarm over the skills gap, something the Trump Administration has launched an initiative to combat.
Fifty-five percent (55%) — and 87% of those hiring or trying to hire — reported few or no qualified applicants for the positions they were trying to fill.
The net percentage of small business owners reporting current inventory levels are “too low” gained 4 points to a net 0, a very positive indicator for demand. The reading confirms inventory reductions are a result of strong sales, rather than less certainty about the future.