US NFIB Survey: July Optimism Index -0.6 to 107.2 - Text

     WASHINGTON (MNI) - The following are excerpts from the National Federation

of Independent Business' monthly Small Business Optimism index published

Tuesday:

     The Small Business Optimism Index posted its sixth highest reading in

survey history for the month of June, at 107.2, down 0.6 from May. Since

December 2016, the Index has averaged an unprecedented 105.4, well above 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."

     Highlights from the June report include:

     Owners reported some of the strongest nominal sales in years. Plans to

invest in additional inventories advanced solidly. Plans to create new jobs

posted a solid gain and the percent of owners with open positions tied the

record high. Reports of compensation increases remained historically high and

finding qualified workers easily held on to the top spot in the "single most

important business problem" list. A net ten percent of all owners (seasonally

adjusted) reported higher nominal sales in the past three months compared to the

prior three months, down five points but still one of the strongest readings in

years. June is the seventh consecutive strong month of reported sales gains.

Reports of sales increases were most frequent in manufacturing and the wholesale

trades.

     "There was a fractional decline in the Index from May to June,

statistically insignificant. 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," said NFIB Chief

Economist Bill Dunkelberg.

     The frequency of reports of positive profit trends hit a record high in

May, moving down only four percentage points in June, maintaining one of the

best readings in the survey's 45 year history. Additionally, reports of positive

sales trends have been historically strong for the past few months, so owners

have had to satisfy the strong sales demand by selling out of inventories. This

produced an increase in the percent of owners planning to invest in new

inventory stocks in the coming months.

     The net percent of owners viewing current inventory stocks as "too low"

gained four points to a net zero percent, a very positive move. This confirms

that the inventory reductions reported were indeed a result of strong sales, not

a result of a less certain future.

     As reported in NFIB's June jobs report, 63 percent of owners reported

hiring or trying to hire, up five points from last month and the highest level

since September 1999. However, 55 percent (87 percent of those hiring or trying

to hire) reported few or no qualified applicants for the positions they were

trying to fill.

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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