Small business owners continue to lack optimism, according to the National Federation of Independent Business. .The NFIB Small Business Optimism Index fell 1.6 points last month to 95.8, its second straight month of being below the 51-year average of 98. The index tracking uncertainty fell four points last month to 92 but remained much higher than its historical average of 68.Owners anticipating improved business conditions dropped six points to a net 15 percent, its lowest mark since October. Owners expecting higher real sales volumes dropped four points from March to a net negative 1 percent, the fourth straight month expectations have fallen. Nineteen percent of small business owners cited labor quality as the most pressing problem for their business, unchanged from March and remaining the No. 1 issue for the third straight month. A seasonally adjusted 34 percent of owners had job openings they could not fill in April, down six points from the previous month and its lowest mark since January 2021.Fourteen percent cited inflation as their top operating issue in April, down two points from the previous month and its lowest reading since September 2021. A net negative 4 percent of owners are planning inventory investments in the coming months down three points from March and an 11-month low. Eighteen percent expect to make capital outlays in the next six months, down three points from March and its lowest mark since April 2020.A net 28 percent were planning price hikes in April, down two points from the previous month. A net 25 percent raised their average selling prices, down point from March. Thirty nine percent reported higher average selling prices, while only 11 percent had lower average selling prices. The majority of owners — 56 percent — rated the condition of their business as “good,” while 27 percent listed their business condition as “fair.” Thirteen percent said their business was in “excellent” condition. A net 33 percent raised compensation, down five points from March, while a seasonally adjusted net 17 percent expect to do so in the next three months, down two points from March. The frequency of positive profit trend reports, though still low at a net negative 21 percent, was seven points higher than in March and a more-than two-year high. Those seeing lower profits cited weaker sales, usual seasonal changes and an increase in the cost of materials as the main reasons. Fifty-eight percent made capital outlays in the last six months, down one point from March. Of those, 40 percent spent on new equipment, 25 percent bought vehicles and 16 percent improved or expanded facilities.
