US Small Business Optimism Index Rises in November

The National Federation of Independent Business reported that its Small Business Optimism Index climbed by 0.8 points in November to 99.0, marking the highest reading in three months and keeping the index above its long-term 52-year average of 98.0, according to the latest survey data.

Of the ten components that make up the index, six saw increases, three declined and one held steady, with the largest contributor to the uptick being a notable rise in the number of owners expecting real sales volumes to improve compared with October. The net percentage of respondents anticipating higher real sales jumped to a seasonally-adjusted 15 per cent, up from the prior month.

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Despite gains in optimism, the uncertainty index also rose by three points to 91, driven largely by a growing share of owners reporting uncertainty about capital expenditure plans over the next three to six months. This suggests that while sentiment on sales prospects has brightened, investment intentions remain cautious.

Small business owners continued to highlight ongoing challenges, with labour quality cited as the top concern by about 21 per cent of respondents, even as this figure dipped from October’s level. Inflation and regulatory burdens remained other key issues for operators navigating the current economic environment.

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In addition, the proportion of owners raising average selling prices surged to a net 34 per cent in November, the largest monthly increase in the survey’s history and the highest level since March 2023, reflecting persistent inflationary pressures in the small business sector.

Overall, while small business confidence edged higher on stronger sales expectations, mixed indicators on investment uncertainty and persistent operational challenges underscore a complex outlook for Main Street enterprises as the year ends.