A monthly measure of optimism among small business owners remains near historic levels on expectations for improving profits and sales.
The National Federation of Independent Business reported its Small Business Optimism Index edged up a tenth of a point to 104.8 in April. The reading has been higher only 20 times in the 45-year history of the index.
“There is no question that small business is booming,” said Bill Dunkelberg, chief economist of the NFIB. “Consumer spending, the new tax law and lower regulatory barriers are all supporting the surge in optimism across all small business industry sectors.”
The NFIB bases the index on monthly surveys of members of the small business advocacy group, most of them small business owners. For April, four of 10 components of the index increased, while three decreased in three remained unchanged.
The proportion of small business owners responding to the survey upon which the April index was based who reported higher earnings rose three points to a net negative 1 percent, the highest reading ever.
The share of owners who said they expect increasing sales rose a point to a net 21 percent. The number of those reporting poor sales fell to a record low.
“Never in the history of this survey have we seen profit trends so high,” said Juanita Duggan, president and chief executive officer of the NFIB. “The optimism small business owners have about the economy is turning into new job creation, increased wages and benefits and investment.”
The proportion of owners who said they expect business conditions to improve fell two points to a net 30 percent.
A net 29 percent of owners reported plans for capital outlays, up three points from March. The share of owners who said they consider now a good time to expand fell a point to a net 27 percent.
A net 16 percent of owners reported plans to increase staffing, down four points. A net 35 percent of owners reported hard-to-fill job openings, unchanged from a month ago. Meanwhile, 22 percent of owners cited finding qualified workers as their single most important business problem. A net 33 percent of owners reported increasing compensation, the highest level since 2000.
A net 1 percent of owners reported plans to increase inventories, unchanged. At a net negative 4 percent, more owners indicated existing inventories were too high than too low.