US NFIB Survey: July Optimism Index +1.6 to 105.2 - Text

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

of Independent Business' monthly Small Business Optimism index published

Tuesday:

     The National Federation of Independent Business (NFIB) monthly Index of

Small Business Optimism, released today, rose 1.6 percent in July to 105.2, a

strong performance led by significant gains in hiring activity.

     "Strong consumer demand is boosting small business optimism," said NFIB

President and CEO Juanita Duggan. "Small business owners are feeling better

about the economy because their customers are feeling better about the economy.

This is a good trend that we hope continues."

     Among the 10 components that make up the Index, seven improved, two

declined, and one remained unchanged. The biggest gains were: job openings (+5);

job creation plans (+4); and sales expectations (+5).

     "Sixty percent of small business owners reported hiring or trying to hire

in July," said NFIB Chief Economist Bill Dunkelberg. "Within that group, 87

percent said they had a tough time finding qualified workers. The labor market

is getting very tight, and the problem is most severe in the construction and

manufacturing sectors."

     Business owners cite "lack of specific skills" as the main reason they

can't find qualified workers, according to new NFIB research included in the

July report. Other common reasons include: work history; social skills; wage

expectations; and attitude.

     Nineteen percent of small business owners listed lack of qualified workers

as their number-one problem, second only to taxes.

     "The number of owners trying to fill positions and create new jobs is very

high," said Dunkelberg. "That's good news for workers, because they can command

higher wages and better benefits. The bad news is that small business employers

are finding it very hard to hire and keep their workers."

     Expected better business conditions, which dipped last month, rose 4 points

in July. Sales expectations also improved 5 points.

     While most of the components were strong in July, capital expenditures

remained average. Capital expenditure plans dropped 2 points. Fifty-seven

percent of owners made capital outlays, which was unchanged from the previous

month.

     "Small business owners are waiting to see what happens on tax reform before

they make big capital improvements or acquisitions," said Duggan.

     Optimism Components:        Seas Adj Level %     Change

     JOB CREATION PLANS                19 (NET)           4

     CAPITAL EXPENDITURE PLANS         28                -2

     INVENTORY PLANS                    5 (NET)           1

     JOB OPENINGS                      35                 5

     INVENTORY SATISFACTION            -2 (NET)           1

     GOOD TIME TO EXPAND               23                 2

     EXPECT BETTER BUSINESS CONDITIONS 37 (NET)           4

     SALES EXPECTATIONS                22 (NET)           5

     EXPECT EASIER CREDIT CONDITIONS   -4 (NET)          -1

     ACTUAL EARNINGS TRENDS           -10 (NET)           0

     INDEX OF SMALL BUSINESS OPTIMISM 105.2              19

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

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