SmallBizResource Blog -- Research

NFIB Releases July Numbers -- And They're Not Pretty

Posted by Gayle Kesten Friday, Aug 15, 2008, 02:00 PM ET

Sorry to end your week on a low note, but the latest stats from the National Federation of Independent Businesses (NFIB) paint a less-than-optimistic mood among small businesses.

NFIB's monthly "Small Business Economic Trends" report is based on a survey of 1,800-plus members -- three-quarters of whom operate businesses with less than 15 employees. According to July's findings, which came out earlier this week:

• NFIB's Optimism Index, based on 10 survey indicators, fell a point from June and 9 points year-over-year.
• Capital spending plans among small businesses dipped to 1975 levels.
• Nearly two-thirds of small businesses earned less than they did in July.
• More than 40 percent of small businesses had to raise their prices.
• The top three biggest problems in the eyes of small businesses are (in descending order) inflation, taxes and poor sales.

As for how NFIB measures optimism, it looks at the following 10 components: plan to increase employment, play to increase capital outlays, plan to increase inventories, expectations that the economy will improve, expectations of higher real sales, current inventory satisfaction, current job openings, expectations of credit conditions, that now is a good time to expand, and earnings trends.

So as not to be a total killjoy, NFIB notes that declines "were mostly offset by gains in expected real sales, business conditions and the percent of owners saying this is a good time to expand."

How's business by you?

Research