Small Business Optimism Ticked Up 0.1% to 101.8 in March

Washington, DC, April 9, 2019-The NFIB Small Business Optimism Index increased 0.1 points to 101.8 in March, a historically strong level and an indication that small businesses continue to power the economy after being briefly shaken by January’s government shutdown. Overall, the Index anticipates solid growth, keeping the economy at “full employment” with no signs of a recession in the near term. The Uncertainty Index dropped six points to 79, returning to a more normal level for recent years.

Five Index components improved, two were unchanged, and three fell. Labor market indicators improved, the outlook for expansion, real sales and reports of rising earnings gained ground, and capital spending plans held steady. The major soft spot was in inventories with stocks viewed as too large and plans to invest in inventories turning slightly negative-more firms planning reductions than additions. 

Sixty percent of small business owners reported capital outlays, up two points and 27% plan capital outlays in the next few months, unchanged. Plans to invest were most frequent in wholesale trades (36%), manufacturing (34%), retail (33%), and transportation (32%). A net five percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, a six-point improvement, rebounding back from the “shut down, slow down” in sales. The net percent of owners expecting higher real sales volumes rose three points to a net 19% of owners, a solid reading.