The NFIB’s Small Business Optimism Index Declines for Sixth Consecutive Month in June

The National Federation of Independent Business (NFIB), one of the largest small business associations in the U.S., reported today (7-12-22) their NFIB Small Business Optimism Index (SBOI) for June 2022. According to the report, the June SBOI fell below the 48-year average reading of 98 for the sixth consecutive month, to a reading of 89.5 in June. That is 3.6 points below the May 2022 reading and a new record low for the index.

Owners surveyed in June expecting better business conditions over the next six months decreased seven points to a net negative 61%, the lowest level recorded in the 48-year-old survey. Expectations for better business conditions have deteriorated every month since the start of 2022.

Thirty-four percent of owners reported inflation was their single most important problem in operating their business, an increase of six points from May and the highest level since Q4 of 1980. The net percent of owners raising average selling prices decreased three points to a net 69% (seasonally adjusted), following May’s record high reading.

Other highlights of the May SBOI report include the following:

1. Fifty percent of owners reported job openings that could not be filled, down one point from May.
2. The net percent of owners who expect real sales to be higher decreased thirteen points from May to a net negative 28%.
3. A net 48% (seasonally adjusted) of owners reported raising compensation, down one points from May. A net 28% of owners are planning to raise compensation in the next three months, up three points from May, and at a historical high.
4. Thirty-nine percent of owners report that supply chain disruptions have had a significant impact on their business, up three points. Another 30% report a moderate impact and 23% report a mild impact. Only 6% of owners report no impact from the recent supply chain disruptions.

In a statement prepared for the release of the June SBOI, NFIB Chief Economist Bill Dunkelberg said, “As inflations continues to dominate business decisions, small business owners’ expectations for better business conditions have reached a new low.”