A monthly measure of confidence among small business owners has increased on more upbeat expectations for sales, expansion and hiring.
The National Federation of Independent Business reported its Small Business Optimism Index rose eight-tenths of a point to 103.8 in October.
“Owners became much more positive about the economic environment last month, which suggests a longer-run view,” said Bill Dunkelberg, chief economist of the NFIB. “In the nearer term, they are more optimistic about real sales growth and improved business conditions through the end of the year.”
Improving consumer confidence is expected to help small businesses, as will growing spending for home improvements, Dunkelberg said.
The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group, most of them small business owners.
For October, four components of the index advanced, while five retreated and one remained unchanged.
A net 21 percent of small business owners who responded to the survey upon which the October index was based said they expect increased sales, up six points from September.
At a net negative 14 percent, more owners reported lower earnings than higher earnings, though. That reading was down three points.
A net 23 percent of owners said they consider now a good time to expand, also up six points. A net 32 percent of owners said they expect the economy to improve, up a point. A net 27 percent of owners said they plan to increase capital spending over the next three to six months, unchanged from September
A net 35 percent of owners reported hard-to-fill job openings, up five points. At the same time, a net 18 percent of owners said they plan to increase staffing. That’s down a point from September. Dunkelberg said what’s been a tight labor market for small businesses has tightened with fewer qualified applicants.
A net 4 percent of owners reported plans to increase inventories, down three points. At a net negative 5 percent, more owners said current inventories were too high rather than too low.