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News June 13, 2018

Survey: Small Business Optimism Nears Historic High

By  Christopher Ruvo

Small business optimism is soaring in the U.S. The National Federation of Independent Business’ just-released Small Business Optimism Index accelerated three points in May to 107.8, the second highest reading in 45 years and the best tally of the economic recovery following the Great Recession.

 

Source: NFIB

As the below chart from NFIB shows, there were month-over-month increases in a variety of gauges used to help articulate the prevailing economic outlook among America’s small business owners. Plans to increase employment and capital outlay were up. Nearly a third think real sales will be higher, while just over one third say now is a good time to expand. Nearly 4-in-10 anticipate further economic improvement.

Source: NFIB

There were some historic highs in May’s index, the NFIB said. Compensation increases hit a 45-year high at a record net 35%. Positive earnings trends reached a survey high at a net 3%. Meanwhile, positive sales trends rose to their highest level since 1995, while expansion plans are the most robust in survey history. The one sour note owners sounded was that it is difficult to find workers with the requisite skills and experience.

Some financial analysts noted that small business sentiment being this high could be a bellwether of greater things to come:

Small business owners have been markedly upbeat since President Donald Trump took office, as analysts have noted. Reduced regulations, tax cuts, and economic growth are helping to drive up owners’ confidence about their businesses and the economy in general.