"Small business owners are expecting sub-par growth in the second half of 2010," said Bill Dunkelberg, NFIB’s chief economist. "Consumers are pessimistic, business owners are pessimistic and Washington’s leadership has been unable to inspire any confidence in the future."
Most of the improvement was accounted for by gains in expected real sales and expectations for business conditions six months out, the two components that lowered the index in July.
Employment Showed no improvement in August. Average employment growth per firm has been negative since April 2007. Eleven percent of respondents reported unfilled job openings, up 1% from July, but historically weak.
Capital Spending and Outlook Forty-four percent of respondents reported capital outlays in the last six months, a point lower than July, and equal to the 35-year record low. Spending in all categoriesnew equipment, vehicles, new, expanded or improved buildingswas weak across the board.
Sales and Inventories A net 16% of owners reported higher nominal sales (seasonally adjusted) in the past three months, the same number as in July. (The net percent is the higher numbergains or lossesminus the lower number.) Unadjusted, 25% of owners reported sales increases, while 33% reported lower sales.
Inflation An increase in average selling prices was reported by 14% of owners, a gain of two points from the previous month. Price reductions were reported by 23% of respondents, down a point from July.
Earnings Reports of positive profit trends (seasonally adjusted) improved three points in August, registering a net-negative 30%, 26 points worse than the best expansion reading reached in 2005.
Not seasonally adjusted, 18% reported profits higher (unchanged), but 42% reported profits falling, a 3 point improvement from July.
Credit A net 12% reported loans harder to get than in their last attempt, one point lower than July. Overall, 91% of the owners reported all their credit needs met or they did not want to borrow, unchanged from July. Only 4% cited financing as their top business problem.