Small Business Optimism rose 1.3 points in July. The increase only partially reverses June’s 4.2-point drop, but the overall level of small business optimism remains well within its recent range and is within a few points of its high for this cycle. While small business confidence remains at a solid level, business owners are nowhere near as positive as they were during the past three expansions. In particular, business owners continue to express a great deal of concern about general business conditions, sales and earnings. Moreover, business owners continue to express a great deal of frustration with the litany of government regulations and mandates they face.
Although the share of business owners that feel now is a good time to expand rose 3 points in July to 12 percent, it remains merely a shadow of its former self and is less than half of what it would normally be this far into an economic recovery. Actual capital spending looks a bit healthier, however. The share of business owners that made a capital expenditure during the past six months rose 3 points in July to 61 percent, which is the highest level this year and one of the highest readings since the recession. Equipment purchases accounted for 42 percent of capital outlays and vehicles accounted for another 25 percent. Other major capital projects include outlays for improved buildings or land, (18 percent), and furniture and fixtures, (13 percent).
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