A monthly measure of optimism among small business owners has posted its largest gain in more than a year on more upbeat expectations for the economy as well as earnings and hiring.
“Owners are aggressively moving forward with their business plans, proving that when they’re given relief from the government, they put their money where their mouth is and they invest, hire and increase wages,” said William Dunkelberg, chief economist of the National Federation of Independent Business.
The NFIB reported its Small Business Optimism Index rose 2.3 points to 104.7 in November. The monthly gain was the largest since May 2018.
Dunkelberg said the latest survey results come in as the two-year anniversary of passage of the Tax Cuts and Jobs Act approaches. “Owners are most closely focused on issues that directly impact their businesses, including the real, significant tax relief they were given two years ago, and they’re anxious to see that relief made permanent.”
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 November, seven of the 10 components of the index increased.
A net 13 percent of owners responding to the survey upon which the November index was based expect the economy to improve, up three points from October.
A net 2 percent of owners reported higher earnings, a 10-point jump from October that took that component to within a point of the record high.
A net 21 percent of owners reported plans to increase staffing, up three points. A net 38 percent of owners reported hard-to-fill job openings, up four points. Moreover, 26 percent of owners cited finding qualified workers as their single most important business problem, a point below the record high.
A net 30 percent of owners reported plans for capital outlays, up a point. A net 29 percent of owners said they consider now a good time to expand, up six points.
A net 3 percent of owners plan to increase inventories, down two points. A net 1 percent of owners said they consider current inventories too low.
A net 13 percent of owners said they expect sales to increase, down four points.