The small business market is looking up in recent reports, as optimism and hiring have both seen gains. As a result, businesses may want to consider the current state of the economy as a good time for potential expansion.
According to the National Federation of Independent Business, the optimism index for small businesses rose by more than half a point in July, reaching a new total of 95.7 points. While that is below initial expectations and remains below the market's break-even point of 100, the gain itself is a strong indicator that the market will see growth before a fall.
There was little change among the index's 10 components that were tracked, but expansion and business conditions rose enough to make a notable change. Meanwhile, capital spending reports have been seen as mediocre, while spending plans are not as extensive as hoped in the market.
The NFIB saw employment rise by 0.01 workers per firm in July. While that's barely an increase, it was the tenth straight month of growth and the best gain seen in eight years. On a seasonally adjusted level, 13 percent of owners gained staff, which was up a point, and they added 2.9 workers each. However, another 12 percent of owners cut payrolls by an average of 2.7 workers, which contributed to the growth.
Interestingly, 24 percent of owners reported openings they could not fill, while another 15 percent used temporary workers. Meanwhile, companies with job creation plans rose to 13 percent, which is the best reading seen in the market since September 2007.
Small business employment leaps
More positive news for the future of small business development came from ADP, which recently found that small business employment increased by 84,000 jobs in July. That figure is restricted to businesses with fewer than 50 employees. With job growth visible in the current market, it goes without saying that the current state of the economy is pushing toward signs of growth and improvement, which may have a long-term boost that leads to increased market activity.
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