Small business optimism recovers from disappointing Q1

    With no recession in sight and job security across the country, optimism among small business owners rose 1.7 percentage points to 103.5 in April, according to the NFIB Small Business Optimism Index. Several business outlook indicators are continuing a steady four-month climb after a series of dips near the end of last year.

    Significantly, sales rebounded from a soft March performance, with recent gains appearing to resolve what the NFIB calls “an excessive Q1 inventory build.” In April, 9% of small business owners reported higher nominal sales over the past three months, a four-point improvement. Also, slightly more owners (20%, compared to 19% last month) expect higher real sales volumes.

    After slowing additions to their inventories last month, less owners (2%, down from 5%) are seeing inventory increases. As a result, fewer owners view stocks as excessive, with more planning to expand inventory holdings.

    Though reports of positive quarterly profit trends increased by 5%, they’re still at a -3%. Less owners (58%) reported capital outlays than in months past—a sign that, while investment spending has been solid for the past two years, more will be needed to make up for the years of weak spending starting in 2008.

    Meanwhile, the difficulty of finding qualified workers remains the small business community’s “single most important business problem.” Fifty-seven percent of business owners said they were hiring or trying to hire (down three points from March), but 86% of them reported few or no qualified applicants for the positions they were trying to fill.

    Check out the rest of the April report here.

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