HORAN Capital Advisors

Weak Small Business Optimism, But Expectations Of A Short-Lived Recession

 May 12 2020     David Templeton
Not surprisingly, small business owners are anything but optimistic about the current environment. The NFIB Small Business Optimism Index fell 5.5 points to 90.9 in April. The NFIB report notes the index has declined 13.6 points in two months. The index is now at a level below the recession in 2001 that occurred after the bursting of the technology bubble.



Also notable in the report is the continued decline in sales expectations over the next three months which stands at negative 42 as seen in the top half of the below chart. This is a 61 point decline from two months ago. Small business owners tend to be an optimistic lot, no pun intended, and the bottom half of the chart shows owners expectations of an improving economy six months from now was reported at a net 29 percent which is 24 percentage points better than March. of course the key to stronger economic activity is for states to begin opening up their economies, which does seem to be occurring.