Small Business Optimism Index Increases in March

The NFIB Small Business Optimism Index increased to 101.8, 0.1 points above February’s reading. This is a historically strong level. 23 percent of business owners surveyed said the next three months was a good time to expand, one point higher than last month’s reading.

“Small business owners continue to create jobs, expand their operations, and are enjoying strong sales,” said NFIB President and CEO Juanita Duggan. “Since Congress resolved the shutdown, uncertainty has declined as small business owners add jobs, increase sales, and invest in their businesses and employees.”

Job creation was solid in March with a net addition of 0.50 workers per firm (including those making no change in employment), close to February’s record of 0.52, and up from 0.33 in January. One percent (down 2 points) reported reducing employment an average of 2.4 workers per firm (seasonally adjusted), the lowest percentage of owners reporting reductions in survey history. Twelve percent (unchanged) reported increasing employment an average of 2.7 workers per firm. Owners are trying to hold on to the employees that they have in a highly competitive labor market. Sixty percent reported hiring or trying to hire (up 3 points), but 54 percent (90 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill (up 5 points). Twenty-one percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, only 4 points below the record high.

Seasonally adjusted, the net percent of owners expecting better business conditions held steady at 11 percent. The percent of owners reporting higher sales in the past three months compared to the prior three months was a net 5 percent, 6 points higher than February. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose three points to 19 percent of owners. Capital spending rose two points as 60 percent of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months declined remained steady at 27 percent.

Credit concerns remained historically low, as just three percent of owners reported that all their borrowing needs were not satisfied, unchanged and historically very low. Thirty-three percent reported all credit needs met (down 1 point) and 51 percent said they were not interested in a loan, unchanged. Six percent reported their last loan was harder to get than the previous one, unchanged and historically low. Only one percent reported that financing was their top business problem (down 1 point).

Read the NFIB report.

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Hugo Dante

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