A May survey (.pdf) from the National Federation of Independent Business Research Center shows that small-business owners were more optimistic about future business conditions than in an April survey.
The center’s small-business optimism index climbed by 3.5 points from April’s 90.9 reading, according to a news release, while only two of the 10 index indicators declined. Forecasts for business conditions throughout the next six months rose by five index points after a 24-point increase in April. Respondents expect a short recession.
“As states begin to reopen, small businesses continue to navigate the economic landscape rocked by COVID-19 and new government policies,” Bill Dunkelberg, chief economist of NFIB, said in the release. “It’s still uncertain when consumers will feel comfortable returning to small businesses and begin spending again, but owners are taking the necessary precautions to reopen safely.”
Real sales forecasts for the next three months increased by 18 points to a net increase to negative 24% from April’s negative 42% drop, according to the release.
Of the 52% of respondents who reported capital expenditures, 35% purchased new equipment, 20% acquired company vehicles, 15% boosted capacity or refurbished their facilities and 5% purchased land or new buildings, said the release. An additional 20% are considering future expenditures, especially following damage from ongoing riots over the past few weeks.
On the other hand, reported nominal sales have dipped since April’s survey by eight points. As consumer income rose with government assistance, but consumers were much more limited in spending options over the past few months, savings increased to a record 33%, said the release.
Earning trends also took a six-point hit, bottoming out a net negative 26% due to weak sales, seasonal trends, price changes and labor and material costs. About 14% of the respondents have boosted employee compensation, while 10% expect to raise wages or salaries in the next three months.
“Hopefully, we’ve turned the corner, and small-business optimism will continue to improve as South Carolina gets back to normal,” Ben Homeyer, director of NFIB’s South Carolina office, said in the release.