NFIB index: Small business owners more upbeat

William Dunkelberg
William Dunkelberg
Juanita Duggan
Juanita Duggan

A monthly measure of optimism among small business owners has increased on more upbeat expectations for economic conditions as well as sales and earnings.

“The ‘real’ economy is doing very well versus what we see in financial market volatility,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business.

The NFIB reported its Small Business Optimism Index rose 1.7 points to 103.5 in April with gains in nine of 10 components of the index.

“Many jobs are being created and GDP produced with no substantive inflation pressure,” Dunkelberg said. “The pace of economic growth has accelerated, and consumers and small businesses are an important part of the improvement in sales.”

Juanita Duggan, president and chief executive officer of the NFIB, said the latest index readings reflect improving stability and certainty for small business owners and in turn optimism and action. “The continued economic boom is thanks in a major way to strong growth in the small business half of the economy,” Duggan 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.

A net 13 percent of those responding to the survey upon which the April index was based expect the economy to improve, up two points from March.

A net 27 percent of owners plan capital outlays in coming months, unchanged. A net 25 percent said they consider now a good time to expand, up two points.

The proportion of owners reporting increased earnings rose five points. But at a net negative 3 percent, more owners still reported lower earnings than higher earnings.

A net 20 percent of owners reported higher sales, up a point.

A net 18 percent of owners expect to increase staffing, up two points. A net 25 percent reported hard-to-fill job openings, also up two points. In addition, 24 percent of owners cited the difficulty of finding qualified workers as their single most important problem, ahead of taxes and government regulations.

A net 2 percent of owners plan to increase inventories, up three points. But at a net negative 4 percent, more owners consider existing inventories too high rather than too low.