Small Business Optimism Rose to 104.5 in February

Washington, DC, March 10, 2020-Small business owners expressed slightly higher levels of optimism in February with the NFIB Optimism Index moving up 0.2 points to 104.5, a reading among the top 10% in the 46-year history of the survey. 

Those expecting better business conditions increased and job creation and openings improved as well. Real sales expectations declined along with 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,” said 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.”

Reports of better business conditions in the next six months improved eight points, to a net 22 percent, 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 two points to 26%.

The net percent of owners raising average selling prices fell four points to a net 11%, seasonally adjusted. A net 5% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down two points from January. The levels of owners expecting higher real sales volumes declined four points to a net 19% of owners.

Small business owners continue to indicate their credit needs are being met with little trouble borrowing. Thirty-two percent reported all credit needs met (up two points), and 55% said they were not interested in a loan (up one point). Two percent of owners reported that all their borrowing needs were not satisfied, down one point, matching the record low.