A monthly measure of optimism among small business owners has edged up on more upbeat expectations for an improving economy but also reflects the challenges in filling job openings.
The National Federation of Independent Business reported its Small Business Optimism Index rose a half point to 101.7 in February.
The index fell in January in the wake of a partial federal government shutdown, the longest in history.
“Owners still want to grow and expect they could sell more if they could hire employees to produce more. Small businesses want to expand in this growing economy, but only if they can find qualified applicants for their open positions,” said Bill Dunkelberg, chief economist for the NFIB.
“On the positive side, now that the government is funded, owners should be getting back to business with the rebound in consumer sentiment,” 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 February, five of 10 components of the index advanced, two retreated and three remained unchanged.
The proportion of small business owners responding to the survey upon which the February index was based who expect the economy to improve rose five points from January to a net 11 percent.
A net 27 percent of owners plan capital outlays in coming months, up two months. Moreover, a net 22 percent consider now a good time to expand, also up two points.
The proportion of owners planning to increase staffing fell two points to a net 16 percent. A net 37 percent of owners reported hard-to-fill job openings, up two points.
In addition, 22 percent of owners cited the difficulty of finding qualified labor as their most pressing business problem. Another 10 percent of owners cited labor costs as their biggest problem, a record high.
A net 1 percent of owners plan to increase inventories, unchanged from January. At a net negative 2 percent, more owners consider existing inventories too high rather than too low.
A net 16 percent of owners expect increasing sales, unchanged. At a negative 9 percent, more owners reported lower earnings than higher earnings.