SMALL BUSINESS OPTIMISM
The heart and soul of the US economy are the small businesses which make up roughly 64% of new private sector jobs added. The NFIB Small Business Optimism Index came in at 104.7, a drop from the prior month, and flat from a year ago. Below highlights the components to the overall index.
Below is our trend analyzer. Small business optimism started the year off on fire, but since then is now back in-line with 2017 trends. As shown below on the right panel, most expectation categories came in below their 6 month averages.
Also, while taxes is becoming less of a concern for small businesses, the competition of large businesses is heating up. Both indices are moving in opposite directions (top left, and bottom right).
Could the announced tax cuts be leading to increased capital to large businesses, by which large businesses are now able to move down-market and encroach on the small - mid sized business market? I think this is occurring in some areas as companies like Salesforce and ADP are now focusing in on the small business market for added growth. Here's a couple headlines from the last 60 days...
See the entire Avory NFIB Small Business Optimism Report here. That's all this month for the NFIB. Make sure to subscribe for future blog posts.
Sean D. Emory
Avory & Co. Founder & Chief Investment Officer
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