NFIB press release, NASHVILLE, Sept. 11, 2018 — The NFIB Small Business Optimism Index
soared to 108.8 in August, a new record in the survey’s 45-year
history, topping the July 1983 highwater mark of 108. The
record-breaking figure is driven by small business owners executing on
the plans they’ve put in place due to dramatic changes in the nation’s
economic policy.
The August survey showed:
- Job creation plans and unfilled job openings both set new records.
- The percentage of small business owners saying it is a good time to expand tied the May 2018 all-time high.
- Inventory investment plans were the strongest since 2005 and capital spending plans the highest since 2007.
“Today’s
groundbreaking numbers are demonstrative of what I’m hearing every day
from small business owners – that business is booming. As the tax and
regulatory landscape changed, so did small business expectations and
plans,” said NFIB President and CEO Juanita Duggan.
“We’re now seeing the tangible results of those plans as small
businesses report historically high, if not rerecord-breaking levels of
increased sales, investment, earnings, and hiring.”
State-specific data is unavailable, but NFIB State Director Jim Brown
said, “When small-business owners feel good about the direction of the
economy, they are more likely to invest in new equipment and new
employees.”
A
net 10 percent of all owners (seasonally adjusted) reported higher
nominal sales in the past three months compared to the prior three
months, up two points. August is the ninth consecutive strong month of
reported sales gains after years of low or negative numbers. The net
percent of owners planning to build inventories rose six points to a
record net 10 percent, the 14th positive reading in the past
22 months. The frequency of reports of positive profit trends rose two
points to a net one percent reporting quarter on quarter profit
improvements, the second highest reading in the survey’s 45-year
history.
“At
the beginning of this historic run, Index gains were dominated by
expectations: good time to expand, expected real sales, inventory
satisfaction, expected credit conditions, and expected business
conditions,” said NFIB Chief Economist Bill Dunkelberg. “Now
the Index is dominated by real business activity that makes GDP grow:
job creation plans, job openings, strong capital spending plans, record
inventory investment plans, and earnings. Small business is clearly
helping to drive that four percent growth in the domestic economy.”
As reported in last week’s NFIB’s monthly jobs report,
a seasonally-adjusted net 26 percent of owners plan to create new jobs
and 38 percent of owners reported job openings they could not fill in
the current period, both survey highs. Sixty-two percent of owners
reported trying to hire, with 89 percent of those owners reporting few
or no qualified applications for their open positions. A record 25
percent of owners cited the difficulty of finding qualified workers as
their Single Most Important Business Problem, up two points from last month.
The
report concludes, “As a leading indicator of economic activity, the
Index turned up sharply late in November 2016 and headed to readings in
the top 5 percent of the Index history in December, never looking back.
Three months later, economic activity soared, rising from 1.5 percent
GDP growth to over 3 percent. Profits are driving the stock indices for
‘small’ firms to record levels, mirroring the record levels of profit
gains for NFIB firms.”
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