Small Business Optimism Rises as Oil Prices Moderate

Small business optimism increased in June, driven by owners’ expectations for better business conditions and sales, the National Federation of Independent Business (NFIB) said in a Tuesday (July 14) press release.

The NFIB Small Business Optimism Index rose 2.1 points during the month to reach 97.4, which is near the 52-year average of 98.0, according to the release. The Index was last above the average in February, when it was gauged at 98.8, according to the NFIB’s Small Business Economic Trends released Tuesday.

The net percent of small business owners expecting better business conditions in the next six months increased for the first time this year. The figure rose 10 points in June to a seasonally adjusted net 13%, according to the release.

The net percent of owners expecting higher real sales volumes over the next quarter rose 8 points to a seasonally adjusted net 9%, per the release.

“Current economic conditions present small business owners with both encouraging developments and ongoing challenges,” NFIB Chief Economist Bill Dunkelberg and NFIB Research Center Executive Director Holly Wade wrote in the Small Business Economic Trends report. “Lower oil prices provide welcome relief for almost all businesses, especially those that rely on transportation, deliveries and other oil-related activities, while also leaving consumers with more discretionary income.”

The NFIB said in April that small business optimism dipped below its 52-year average for the first time in a year in March, driven by the Iran war and the subsequent surge in oil prices.

The most recent The Conference Board Measure of CEO Confidence, which was released May 28, found that optimism among leaders of large firms tumbled in the second quarter.

CEO assessments of current conditions and expectations, for the economy and their own industries, deteriorated in the second quarter compared to the first due to business risks.

The University of Michigan’s Surveys of Consumers final results for June found that consumer sentiment improved during the month as gas prices moderated.

Consumer sentiment improved by 10%, with increases seen across income, wealth and political affiliation, driven in part by an easing in consumers’ worries about the impact of the Iran war.