BURSTOptimism among small businesses rose last month, with respondents reporting better business conditions, despite uncertainty around tariffs and inflation.
The National Federation of Independent Business (NFIB) said on Tuesday that its Small Business Optimism Index went up 1.7 points in July to 100.3, just above the index’s long-term average of 98.
The factors that contributed to the rise were respondents reporting better business conditions and arguing that it is a good time to expand. About 16 percent of respondents said it was a good time to expand their business, a 5 point increase from June.
The uncertainty index spiked by 8 points from June to 97. About 1 in 5 small businesses, 21 percent, said that labor quality was the most important problem, increasing by 5 points from June.
“Optimism rose slightly in July with owners reporting more positive expectations on business conditions and expansion opportunities. While uncertainty is still high, the next six months will hopefully offer business owners more clarity, especially as owners see the results of Congress making the 20 percent Small Business Deduction permanent and the final shape of trade policy,” Bill Dunkelberg, chief economist at NFIB, said in a statement.
“Meanwhile, labor quality has become the top issue on Main Street again,” Dunkelberg added.
When discussing the overall health of their business, 52 percent of respondents said it was “good,” 13 percent said it was “excellent,” 4 percent said it was “poor” and 31 percent said it was “fair.”
Around 11 percent of owners said that inflation was their most important problem in running their business. Some 6 percent of owners are expecting higher real sales volumes.