The NFIB Small Business Optimism Index showed little change in June, dropping slightly by 0.2 points to 98.6, which is just above the long-term average of 98. The decline was largely due to an increase in respondents reporting excess inventories. Meanwhile, the Uncertainty Index saw a decrease of five points from May, settling at 89.
“Small business optimism remained steady in June while uncertainty fell,” said NFIB Chief Economist Bill Dunkelberg. “Taxes remain the top issue on Main Street, but many others are still concerned about labor quality and high labor costs.”
State-specific data was not available; however, NFIB State Director Jason Espinoza commented on how New Mexico’s small business owners are managing economic conditions.
“The national survey reflects what we’re hearing from our members here in New Mexico,” Espinoza said. “The decline in certainty underscores just how important predictability is for small business owners. There’s no doubt that Main Street is relieved the automatic tax hikes scheduled to take place at the end of the year have been avoided, and that the 20 percent small business deduction has been made permanent.”
Among key findings: A net negative 5% of owners considered their inventory stocks too low in June, indicating a net increase in inventories compared to May. Twelve percent reported inventories as too high in June compared to seven percent previously.
Expectations for better business conditions dropped three points from May to a net 22%, though this remains positive historically with a long-term average of a net three percent.
Regarding sales volumes, expectations fell three points from May to a net seven percent. Capital outlay plans for the next six months decreased slightly by one point to twenty-one percent.
Labor quality issues remained constant with sixteen percent identifying it as their primary concern, unchanged since May. Inflation concerns were noted by eleven percent of owners, marking a decrease and reaching its lowest level since September 2021.
A deterioration was observed in the overall health ratings of businesses; those reporting excellent or good health declined significantly while reports of fair or poor health increased.
In terms of employment, thirty-six percent reported unfilled job openings in June—an increase from May—and eighty-six percent faced challenges finding qualified applicants among those hiring.
Labor costs rose as a concern by one point to ten percent; meanwhile, compensation increases were noted by thirty-three percent—a notable rise since January 2020—and nineteen percent plan further raises within three months.
Capital expenditures over six months showed fifty-percent engagement among owners—a drop since August 2020—with spending focused on equipment (thirty-three percent), vehicles (eighteen), and facilities (thirteen).
Sales issues climbed slightly with ten-percent citing poor sales as their main problem after stability over previous months; nominal sales figures improved marginally since May.
Inventory gains fell while price increase plans rose modestly—the highest since March last year—and profit trends improved somewhat despite remaining negative overall.
Financing difficulties eased slightly yet borrowing rates edged higher alongside expansion sentiment improvements albeit historically low levels persistently exist across these areas alongside tax burdens consistently ranking atop owner concerns per nineteen-percent recognition rates akin July twenty-twenty-one observations amid ongoing regulatory challenges alongside competitive pressures emanating large-scale enterprises persistently acknowledged throughout recent cycles extensively documented via longstanding NFIB research endeavors culminating quarterly annually extensive monthly surveys systematically executed among membership-based respondent pools releasing timely insightful findings every second Tuesday accordingly captured latest comprehensive assessments conducted concluding final evaluations rendered completed analyses finalized comprehensively conveyed herein articulated succinctly expounded forthwith duly constituted presented disseminated accordingly ratified conclusively 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