Small Business Optimism Remained Strong in May

The NFIB Small Business Optimism Index held steady at 104.5 in May, maintaining the high level of post-election optimism. Five of the ten index components rose, while four declined.

Reported job creation has improved, as 59% of businesses reported hiring or trying to hire. However, 51% reported few or no qualified applicants for the positions they were trying to fill. Nineteen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 18% of owners plan to create new jobs, up two points from the previous month.

Seasonally adjusted, the net percent of owners expecting better business conditions rose one point to a net 39%. The percent of owners reporting higher sales in the past three months compared to the prior three months remained at 5%. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose two points to a net 22% of owners. Capital spending moved up three points as 62% of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months increased one point to 28%, which is high for the recovery but well below historical levels for periods of growth.

Credit conditions mostly held steady, as 3% of owners reported that all their borrowing needs were not met, unchanged from April. Only 1% of business owners surveyed reported that financing was their top business problem, down one point from April.

Read the NFIB report.