Small Business Optimism Index Steady in December

The NFIB Small Business Optimism Index held steady at 104.4, 0.4 points below November’s reading. The December reading continues to hover near August’s record high of 108.8. Twenty-four percent of business owners surveyed said the next three months was a good time to expand, five point lower than last month’s reading.

Reported job creation strengthened, as 60 percent of businesses reported hiring or trying to hire. However, 90 percent of those hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill. Twenty-three percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem, down two points from last month. A seasonally adjusted net 23 percent of owners plan to create new jobs, up one point from last month.

Seasonally adjusted, the net percent of owners expecting better business conditions declined six points to 16 percent. The percent of owners reporting higher sales in the past three months compared to the prior three months was a net 4 percent, down five points from November. Seasonally adjusted, the net percent of owners expecting higher real sales volumes fell one points to 23 percent of owners. Capital spending remained unchanged as 61 percent of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months declined four point to 25 percent.

Credit concerns remained historically low, as just 4 percent of owners reported that all their borrowing needs were not met, one point up from November. Only three percent of business owners surveyed reported that financing was their top business problem, while 13 percent of survey participants listed taxes as their top business problem, down six percent from the previous month.

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Hugo Dante

Hugo Dante is a research associate in the Economic Policy and Research group at the ABA.