Small Business Optimism Remains High, NFIB

Washington, DC, March 15, 2017—Small business optimism remained at one of its highest readings in 43 years, as small business awaits a new healthcare law, tax reform, and regulatory relief from Washington, according to the February National Federation of Independent Business (NFIB) Small Business Optimism Index.

The Index fell 0.6 points in February to 105.3 yet remains a very high reading. The slight decline follows the largest month-over-month increase in the survey’s history in December and another uptick in January. Three of the ten components increased, six declined modestly, and one was unchanged. Despite a small decrease, nearly half of owners expect better business conditions in the coming months.

The job openings component reached its highest level since December 2000, but more owners reported difficulty finding qualified workers to fill open positions. The scarcity of qualified workers is pressuring owners to raise compensation to retain and attract good employees. Twenty-six percent of small business owners reported raising compensation, one of the highest readings since February 2007.

Business owners reporting higher sales improved four percentage points, rising to the first positive reading since early 2015. The percent of owners expecting higher real sales fell three points to a net 26%. This follows a 20-point rise in December and remains positive.

Capital spending among small business owners rose two points to 62%, the second highest reading since 2007. Owners reported spending on new equipment, vehicles, and improvement or expansion of facilities. The percent of owners planning capital outlays slipped one point to 26%.