Small business optimism eclipsed pre-shutdown levels last month as business owners report higher expectations for sales, hiring and expansion, according to the latest survey from the National Federation of Independent Business.
NFIB’s optimism index increased 1.5 points to 105.0 in May. Six components of the index improved, three were unchanged, and one dipped when compared to the month prior.
The number of business owners reporting capital outlays increased six points to 64%, the highest reading since February 2018. Plans to invest were most frequent in transportation (45%), manufacturing (39%), professional services (39%) and construction (31%).
“Small business owners are demonstrating continued confidence in the strength of the economy and are betting capital spending dollars on it,” said NFIB Chief Economist William Dunkelberg. “This solid investment performance is supporting ongoing improvements in productivity and real wages.”
A net 9% of all owners (seasonally adjusted) reported higher nominal sales over the past three months, unchanged from April and historically strong. The net percent of owners expecting higher real sales volumes rose three points to a net 23% of owners. A net 16% expect better business conditions, and 30% say now is a good time to expand, a five-point increase. The frequency of reports of positive profit trends improved two points to a net negative 1%, a solid gain. Read the full report.