US small-business sentiment hits highest level since Feb ’22

US small-business sentiment improved in July, with the Optimism Index surging by 2.2 points in July 2024 to 93.7, the highest level since February 2022, the National Federation of Independent Business (NFIB) said on Tuesday. However, the index remains below the 50-year average of 98 for the 31st consecutive month.

The report indicates that a net 33 per cent of owners raised compensation in July, down 5 points from June and the lowest since April 2021. A net 2 per cent plan inventory investment in the coming months, up 4 points from June, marking the first positive outlook since October 2022.

The net percent expecting higher real sales volumes rose 4 points to a net negative 9 per cent, the highest of the year. Conversely, the net percent of owners raising average selling prices fell by 5 points to a net 22 per cent. A net 24 per cent plan price hike in July, the lowest since April 2023.

Labour market challenges persist, with 38 per cent of owners reporting unfilled job openings, up by 1 point from June. Among the 57 per cent of owners hiring or trying to hire, 86 per cent reported few or no qualified applicants.

Capital spending recorded a slight increase, with 54 per cent of owners reporting recent expenditures. Of those investing, 36 per cent spent on new equipment, 22 per cent acquired vehicles, and 15 per cent improved or expanded facilities. A net 2 per cent of owners plan capital outlays in the next six months, unchanged from the previous three months.

Attribution: US NFIB SMALL BUSINESS ECONOMIC TRENDS

Sub-Editing: Y.Yasser