Not since the roaring Reagan economy has small business optimism been as high as it was in November, according to the National Federation of Independent Business (NFIB) Index of Small Business Optimism, released today.
“We haven’t seen this kind of optimism in 34 years, and we’ve seen it only once in the 44 years that NFIB has been conducting this research,” said NFIB President and CEO Juanita Duggan. “Small business owners are exuberant about the economy, and they are ready to lead the U.S. economy in a period of robust growth.”
The Index gained 3.7 points in November, a sharp increase over what was already a near-record performance the previous month. Eight of 10 components posted gains, including a stunning and rare 16-point gain in Expected Better Business Conditions and a 13-point jump in Sales Expectations.
“This is the second-highest reading in the 44-year history of the Index,” said NFIB Chief Economist Bill Dunkelberg. “The NFIB indicators clearly anticipate further upticks in economic growth, perhaps pushing up toward four percent GDP growth for the fourth quarter. This is a dramatically different picture than owners presented during the weak 2009-16 recovery.
“The change in the management team in Washington has dramatically improved expectations,” he continued.
Job Creation plans increased six points last month, providing more evidence of a strong labor market. The number of owners who said it’s a Good Time to Expand rose four points; Inventory Plans increased by three points; Inventory Satisfaction increased by three points; and Actual Earnings Trend moved up two points.
“Job creation faded, but hiring plans soared, primarily in construction, manufacturing, and professional services,” said Dunkelberg.
Finding qualified workers has been a persistent problem all year for small business owners, a reliable sign of growing economy. Last month, it was the second most important problem facing small business owners. Only taxes polled higher.
“Small business owners are paying very close attention to what is happening in Washington,” said Duggan. “They continue to list taxes as their number-one problem, but they now have clear expectations that Congress and the President will address that problem.
“As long as Congress and the President follow through on tax reform, 2018 is shaping up to be a great year for small business, workers, and the economy.”
To read the full report on the Small Business Optimism Index, click here.