Jul 12, 2023 - Economy

Small business optimism ticks higher in June

Data: NFIB; Chart: Axios Visuals
Data: NFIB; Chart: Axios Visuals

The vibes from small business owners are still pretty pessimistic — but they seem to have stopped getting worse. The NFIB's Small Business Optimism Index, out Tuesday, ticked up in June to the highest level so far this year.

Why it matters: Small businesses often feel an economic slowdown more quickly or sharply than large corporations — they have less scale, less margin for error, and less access to capital markets.

  • And as Axios' reported, things have been pretty tough out there lately for small business owners — especially following the regional banking mini-crisis in March.

State of play: Although small business leaders are still more pessimistic than the Index's historical average of 98 (going back 49 years), there are a few green shoots worth highlighting.

  • The share of companies planning for capital expenditures in the next 3-6 months went up to 25% in May — and held steady there in June. That's up from 21% at the beginning of the year (and it dipped to 19% in the wake of the March bank failures).
  • Context: An increase in spending plans is not what you expect to see going into a recession, as Axios' Neil Irwin recently explained.
  • Meanwhile, the share of owners expecting better business conditions in the next six months improved by 10 points in June, to the best reading since February 2022. (But still, more owners are negative than positive.)

Go deeper: Read the NFIB's June report

Go deeper