The NFIB Small Business Optimism Index declined to 101.2, 3.2 points below December’s reading. This is the lowest reading since the last three weeks of November 2016, when the index experienced a seven-point boost from 95 to 102 following the announcement of the election results. Twenty percent of business owners surveyed said the next three months was a good time to expand, four points lower than last month’s reading.
Reported job creation strengthened, with a net addition of 0.33 workers per firm. This due to 56 percent of reporting businesses hiring or trying to hire. However, 88 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 18 percent of owners plan to create new jobs, down five points from last month.
Seasonally adjusted, the net percent of owners expecting better business conditions declined ten points to 6 percent. The percent of owners reporting higher sales in the past three months compared to the prior three months was a net 4 percent, unchanged from December. Seasonally adjusted, the net percent of owners expecting higher real sales volumes fell seven points to 16 percent of owners. Capital spending dropped one point as 60 percent of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months declined increased one point to 26 percent.
Credit concerns remained historically low, as just 3 percent of owners reported that all their borrowing needs were not met, one point down from December. Only two percent of business owners surveyed reported that financing was their top business problem, while 15 percent of survey participants listed taxes as their top business problem, up two percent from the previous month.
Read the NFIB report.
