US small business optimism dips slightly but still skirting record-high level

The US small business optimism index on Tuesday posted the sixth highest reading in its history, at 107.2 in June, down 0.6 from May but well above its 45-year average of 98.

The figures, put together by the National Federation of Independent Business (NFIB), rival the all-time high of 108.0 achieved in July 1983 and showed that some small business owners are reporting their strongest nominal sales in years.

June is the seventh consecutive month of reported sales gains, with gains most prevalent in the manufacturing and the wholesale trades.

Juanita Duggan, NFIB president and chief executive, said: “Small business owners continue to report astounding optimism as they celebrate strong sales, the creation of jobs, and more profits. 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.”

In terms of job creation a joint record high percentage of small businesses with open positions, with 63% of owners reported hiring or trying to hire, up five points from last month and the highest level since September 1999.

However, in reflection of US unemployment rates, 87% of those hiring or trying to hire reporting few or no qualified applicants for the positions they were trying to fill.

Bill Dunkelberg, NFIB chief economist, said: “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.”

The NFIB has conducted its small business optimism survey since the fourth quarter of 1973, with respondents drawn from its membership.