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Small businesses nationwide, as a group, are enjoying a heavy dose of optimism.
For starters, the National Federation of Independent Business Small Business Optimism Index increased 1.5 points in May to 105 — the highest since the late 2018 federal government shutdown. Of the 10 components in the index, six improved, three were unchanged and one dipped, the NFIB says in a statement.
Capital spending plans increased along with actual outlays. Small business owners’ expectations for sales, business conditions and expansion all rose, the report shows. Earnings, job creation and compensation also remained strong.
Business owners reporting capital outlays increased six points to 64%, the highest reading since February 2018. Nearly one-third of the respondents, 30%, plan capital outlays in the next few months, up three points. Plans to invest were most frequent in transportation at 45%, manufacturing at 39%, professional services at 39% and construction at 31%.
“Optimism among small business owners has surged back to historically high levels, thanks to strong hiring, investment and sales,” NFIB President and CEO Juanita Duggan says in the statement. “The small business half of the economy is leading the way; taking advantage of lower taxes and fewer regulations; and reinvesting in their businesses, their employees and the economy as a whole.”
Other findings in the report include:
• A net 9% of all owners, seasonally adjusted, reported higher nominal sales in the past three months;.
• The net percent of owners expecting higher sales volumes rose three points to 23%.
• Three out of 10 respondents, 30%, say now is a good time to expand, a five-point increase over April.
• Nearly two-thirds of respondents, 62%, reported hiring or trying to hire employees, up five points from April. Of course, in a telling but not surprising sign, more than half those respondents, 54%, reported few or no qualified applicants for the positions they were trying to fill.
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