A monthly measure of optimism among small business owners has slipped, but remains near historically high levels.
The National Federation of Independent Business reported its Small Business Optimism Index fell to 107.9 in September.
That’s nine-tenths of a point lower than the record high of 108.8 posted in August, but still the third-highest reading in the 45-year history of the index.
“This is the longest streak of small business optimism in history, evidence that tax cuts and regulatory rollbacks are paying off for the economy as a whole,” said Juanita Duggan, president and chief executive officer of the NFIB. “Our members say that business is booming and that prospects continue to look bright.”
Bill Dunkelberg, chief economist of the NFIB, said the economic expansion continues to deliver a “spectacular performance” despite its record length. “Small business owners continue to face labor force challenges, but are increasing compensation to keep up.”
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 September, six of 10 components of the index retreated, while three advanced and one remained unchanged.
The proportion of those who responded to the survey upon which the September index was based who expect the economy to improve slipped a point to a net 33 percent.
A net 30 percent of business owners reported plans to increase capital outlays in coming months, down three points from August. A net 33 percent said they consider now a good time to expand, down a point.
A net 23 percent of business owners reported plans to increase staffing, down three points. A net 38 percent of owners reported unfilled job openings, unchanged from a month ago, and 22 percent cited the difficulty of finding qualified workers as their single most important business problem. A net 37 percent of owners reported raising compensation, topping the previous record of 35 percent in May 2018.
The proportion of business owners planning to increase inventories dropped seven points to a net 3 percent. At a net negative 1 percent, more owners indicated their existing inventories were too high rather than too low.
At the same time, though, the share of owners who said they expect sales to increase rose three points to 29 percent. A net negative 1 percent reported higher earnings, down two points.