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Weekly Economic Commentary


Small Business Outlook Improves in April

May 8, 2012

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The April survey of the National Federation of Independent Business points to a noticeable improvement in the outlook of small businesses. The Small Business Optimism Index increased 2 points to 94.5 in April. Excluding the February 2011 reading, the April mark is the best since December 2007.

Chart 1 - 05 08 2012

Five percent of the respondents plan to increase payrolls compared with none in March. Also, as per the April survey, 25% would raise capital expenditures in the next six months, up from 22% in the prior month. The strength of the response pertaining to capital expenditures during April is the best in the current recovery (see Chart 2).

Chart 2 - 05 08 2012

Sales are what matters for the survival of businesses. Well, the percentage of respondents reporting poor sales as their single biggest problem fell to 19% in April from 22% in March. The April assessment of sales is also the best in the current recovery/expansion (see Chart 3). Putting together the different aspects of the NFIB survey together, the main message is that a widespread improvement is visible in the NFIB survey results of April.

Chart 3 - 05 08 2012










The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.