Small Business Optimism Index Nears Record High in February

The NFIB Small Business Optimism Index grew to 107.6, 0.7 point above January’s reading. February’s report was the second highest reading in the 45-year history of the index. Six of the ten index components rose in February, while one declined. Thirty-two percent of business owners surveyed said the next three months was a good time to expand, unchanged from last month’s reading.

Reported job creation fell three points, as 52% of businesses reported hiring or trying to hire. However, 47% reported few or no qualified applicants for the positions they were trying to fill. Twenty-two 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, down two points from last month.

Seasonally adjusted, the net percent of owners expecting better business conditions increased two points to 43%. The percent of owners reporting higher sales in the past three months compared to the prior three months was a net 8%, a three point improvement from January. Seasonally adjusted, the net percent of owners expecting higher real sales volumes grew three points to 28% of owners. Capital spending grew five points as 61% of owners reported capital outlays, the highest reading since 2000. The percent of owners planning capital outlays in the next 3 to 6 months was unchanged at 29%.

Credit concerns remained historically low, as just 2% of owners reported that all their borrowing needs were not met, one lower than January. Only 2% of business owners surveyed reported that financing was their top business problem.

Read the NFIB report.

About Stephen Newton

Stephen Newton is an economic research associate at ABA.
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