A monthly measure of optimism among small business owners has moved closer to record heights on more upbeat expectations for improving economic conditions and sales.
“Small business owners are telling us loud and clear that they’re optimistic, ready to hire and prepared to raise wages,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business. “The fact that several components saw significant increases tells us that small businesses are flourishing in a way we haven’t seen in over a decade.”
Juanita Duggan, president and chief executive officer of the small business advocacy group, said such policy changes as lower taxes and fewer regulations have helped small businesses. “After years of standing on the sidelines and not benefiting from the so-called recovery, Main Street is on fire again.”
“When small business owners have confidence and certainty in the economy, they’re able to hire more workers and invest in their businesses,” Duggan added.
The NFIB reported its Small Business Optimism Index rose seven-tenths of a point to 107.6 in February That’s just below the peak reading of 108 for the index recorded in July 1983.
The NFIB bases the index on the results of monthly surveys of members of the group, most of them small business owners. For February, six of 10 components of the index advanced, while three remained unchanged and one retreated.
The proportion of small business owners responding to the survey upon which the February index was based who said they expect the economy to improve rose two points to a net 43 percent.
The share of owners who said they consider how a good time to expand held steady at a net 32 percent, the highest level in the 45-year history of the index. A net 29 percent of owners said they plan to make capital outlays.
A net 28 percent of owners said they expect increased sales, up three points to one of the highest readings since 2007. At a net negative 3 percent, more owners still reported lower earnings than higher earnings, however.
A net 18 percent of owners said they plan to increase staffing, down two points. A net 22 percent of owners said they plan to raise worker compensation. A net 34 percent of owners reported hard-to-fill job openings, unchanged from January.
Finding qualified workers emerged as what small business owners identified as their most pressing problem, surpassing taxes and regulations in the top spot for the first time in two years.
A net 4 percent of owners reported plans to increase inventories, up a point. At a net negative 3 percent, more owners reported existing inventories were too high than too low.