The National Federation of Independent Business (NFIB) Small Business Optimism Index jumped 2 points in January and a set a new record for the number of small business owners saying now is a good time to expand.
“Main Street is roaring,” said NFIB President and CEO Juanita Duggan. “Small business owners are not only reporting better profits, but they’re also ready to grow and expand. The record level of enthusiasm for expansion follows a year of record-breaking optimism among small businesses.”
The percentage of small business owners who said “Now Is a Good Time to Expand” came in at 32%, the highest level in the history of the NFIB index that began in 1973. Actual Earnings climbed up 11 points from December, the highest level reported since 1988. Plans to make Capital Outlays increased 2 points, while Plans to Increase Inventories rose by 4 points.
“The historically high index readings over the last year tell us small business owners have never been more positive about the economy,” said NFIB Chief Economist Bill Dunkelberg. “This is in large response to the new management in Washington tackling the biggest concerns of small business owners – high taxes and regulations.”
The skills gap, which was the focus of a meeting at the White House between President Donald Trump and small business owners, continues to plague the labor market. President Trump signed an executive order to expand apprenticeship programs in an effort to close the skills gap.
But the demand is contributing to recent upward pressures on wages. Those reporting higher worker compensation rose 4% to a net 31%, the highest reading since 2000 and among the highest in the 45 years of NFIB’s survey. Plans to raise compensation also rose one point to a net 24%, the highest reading since 1989.
“Finding qualified workers now exceeds taxes and regulations as the top concern for small businesses,” Ms. Duggan added.