Small-business optimism sighed in July, with NFIB’s monthly Index increasing just over half-a-point (0.6) for a total reading of 94.1. This month’s report continues the historically weak trend of owner confidence. On the positive front, while the two labor market indicators remained weak, both improved and are beginning to push into “normal” territory. But uncertainty about the future remains endemic among jobs creators, only nine percent of respondents think that now is a good time to expand their businesses.

Selected Highlights from the Report:

Sales - The net percent of all owners reporting higher nominal sales in the past three months compared to the prior three months improved a point, rising to a negative 7 percent. The net percent of owners expecting higher real sales volumes rose 2 points, to 7 percent of all owners. These expectations remain depressed and are not the kind that will generate a lot of new employment or new orders for inventories.

Credit Markets - Credit continues to be a non-issue for small employers, five percent of whom say that all their credit needs were not met in July, unchanged from June and May, and the lowest reading since February 2008. Thirty (30) percent of owners surveyed reported all credit needs met, and 52 percent explicitly said they did not want a loan (65 percent including those who did not answer the question, presumably uninterested in borrowing). 
 
Capital Outlays - In July, the frequency of reported capital outlays over the past six months fell 2 points to 54 percent, 7 points below the average spending rate through 2007. The percent of owners planning capital outlays in the next three to six months was, again, unchanged at 23 percent. Reports of outlays fell almost across the board, painting a weaker spending picture than the month prior.

To read the full NFIB report, click here.