Small business owners expressed slightly higher levels of optimism in February, with the National Federation of Independent Business’s Optimism Index moving slightly higher to 104.5—a reading that’s among the top 10% in the survey’s 46-year history.
According to the NFIB survey, those expecting better business conditions increased, and job creation and openings improved as well. However, real sales expectations declined, as did capital expenditure and inventory plans.
“The small business economic expansion continued its historic run in February, as owners remained focused on growing their businesses in this supportive tax and regulatory environment,” says NFIB chief economist William Dunkelberg. “February was another historically strong month for the small business economy, but it’s worth noting that nearly all of the survey’s responses were collected prior to the recent escalation of the coronavirus outbreak and the Federal Reserve rate cut. Business is good, but the coronavirus outbreak remains the big unknown.”
State-specific data is unavailable, but NFIB state director Dawn Starns says, “Our members ere upbeat about the economy at the beginning of the year, but that may be tempered by some of the anti-small business bills queued up in the Legislature.”
Reports of better business conditions in the next six months improved 8 points, to a net 22%, according to the survey. The NFIB Uncertainty Index fell one point in February to 80. Those who say it is a good time to expand dipped to 26%.
As reported in last week’s NFIB’s monthly jobs report, small business owners added an average of 0.43 workers per firm, but finding qualified workers remained the top issue with 25% reporting this as their No. 1 problem, two points below August’s record high.
Also worth noting is that historically high percentages of owners plan to raise worker compensation, according to the survey. Eight percent cited labor costs as their top problem. Read the full survey report from NFIB.
