NFIB’s Small Business Optimism Index Slips Lower in April

The National Federation of Independent Business (NFIB), one of the largest small business associations in the US, reported on Tuesday (5-10-23) its Small Business Optimism Index (SBOI) for April. According to the report, the April SBOI declined by 1.1 points to a reading of 89.0. This marks the sixteenth consecutive month below the survey’s 49-year average of 98. The last time the index was at or above the average was in December 2021.

Owners expecting better business conditions over the next six months declined 2 points from March to a net negative 49%, although 12 percentage points better than June 2022 when the reading was a negative 61%.

Other highlights of the SBOI include the following:

• The frequency of reports of positive profit trends was a net negative 23%, 5 points worse than in March.
• A negative 5% of owners viewed current inventory stock as “too low” in April, down 6 points from March. This suggests stocks are now too large relative to anticipated sales.
• The net percent of owners raising average selling prices declined 4 points to a new 33% (seasonally adjusted).
• The net percent of owners who expect real sales to be higher deteriorated 4 points from March to a negative 19%.

Adding additional background and his analysis to the report, NFIB Chief Economist Bill Dunkelberg said:

“Optimism is not improving on Main Street as more owners struggle with finding qualified workers for their open positions. Inflation remains a top concern for small businesses but is showing signs of easing.”