Small Business Optimism Rises to Highest Level Since 1983

The NFIB Small Business Optimism Index grew to 107.5, 3.7 points above October’s reading. This was the second highest reading in the 44-year history of the index. Eight of the ten index components rose, while two declined. Twenty-seven percent of business owners surveyed said the next three months was a good time to expand, four points higher than last month’s reading.

Reported job creation fell seven points, as 52% of businesses reported hiring or trying to hire. However, 44% reported few or no qualified applicants for the positions they were trying to fill. Eighteen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 24% of owners plan to create new jobs, up six points from the previous month, an index record.

Seasonally adjusted, the net percent of owners expecting better business conditions increased sixteen point to 48%. The percent of owners reporting higher sales in the past three months compared to the prior three months was a net -5%, a six point decline from October. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose thirteen points, growing to 34% of owners. Capital spending fell was unchanged as 59% of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months fell one point to 26%.

Credit conditions remained historically low, as 4% of owners reported that all their borrowing needs were not met, unchanged from October. Only 2% of business owners surveyed reported that financing was their top business problem, compared to 22% citing taxes.

Read the NFIB report.

About Stephen Newton

Stephen Newton is an economic research associate at ABA.
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