Small-business owners across the United States are feeling more upbeat about the state of the economy as a growing number expect the downturn to be “short-lived,” the National Federation of Independent Business (NFIB) reports.
The NFIB’s optimism index jumped 3.5 points in May to 94.4, a “strong improvement” over its April reading of 90.9, the small business group noted in a press release.
The improvement comes after the NFIB’s index plunged earlier this spring to levels not seen in a decade in the wake of the coronavirus lockdown in states across the country, with the index was running as high as 104.7 last November.
After plunging 24 points in April, optimism over future business conditions rose 5 points in May, with 34 percent of business owners now expecting improved economic conditions over the next six months.
The survey results for the NFIB’s index, in turn, were taken before last Friday’s stunning Labor Department jobs report, which reported a drop in the jobless rate to 13.3 percent on a wave of 2.5 million new jobs.
“As states begin to reopen, small businesses continue to navigate the economic landscape rocked by COVID-19 and new government policies,” NFIB Chief Economist Bill Dunkelberg said in the release.
Still, small businesses face a number of challenges, with a combination of remaining restrictions on business activity by states in response to the coronavirus — and ongoing health concerns by consumers — putting a major damper on sales.
The number of small-business owners reporting a nominal increase in sales dropped 8 points in May from April amid a big drop in retail sales across the U.S. economy.
Fully 20 percent of small business owners expect to make capital outlays over the next several months, the NFIB reported. That’s down from the 52 percent who spent money over the last six months on new equipment, vehicles, expanded facilities, fixtures and furniture, and land and buildings as well.
“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,” said NFIB’s Dunkelberg.