Small business confidence in the US has improved from the depth of the crisis in 2008/09, but has moved sideways in the past 12 months. A return of confidence to pre-crisis levels has been identified by many as one of the key missing components of the recovery to date. We are getting closer, but it seems that investors need to wait a bit longer.
Key sub-components of the NFIB survey such as price expectations and the ratio of capex expectations relative to current trends have not broken higher. On the positive side, it is worth noting that the availability of loans to small businesses in the US has improved in the past 12 months (in stark contrast to the situation in Europe).
A further increase in capex expectations would be a positive here as well as we would need to see a more bullish trend in the price expectations component to match the current and decent readings in actual earnings in order to become more positive.