Small businesses are feeling increasingly optimistic about the economy, a new study from the National Federation of Independent Business (NFIB) finds.
The NFIB showcased it’s Small Business Optimism Index on Tuesday which increased 0.1 points to 101.8 in March. The NFIB noted this is a “historically strong level and an indication that small businesses continue to power the economy after being briefly shaken by January’s government shutdown.” According to the NFIB, the index anticipates “solid growth, keeping the economy at ‘full employment’ with no signs of a recession in the near term” which its Uncertainty Index dropped six points to 79.
“Five Index components improved, two were unchanged, and three fell,” the NFIB noted. “Labor market indicators improved, the outlook for expansion, real sales and reports of rising earnings gained ground, and capital spending plans held steady. The major soft spot was in inventories with stocks viewed as too large and plans to invest in inventories turning slightly negative – more firms planning reductions than additions.”
Juanita Duggan, the president and CEO of the NFIB, said small businesses were feeling more confident now that the federal shutdown is in the rear view mirror.
“Small business owners continue to create jobs, expand their operations, and are enjoying strong sales,” Duggan said on Tuesday. “Since Congress resolved the shutdown, uncertainty has declined as small business owners add jobs, increase sales, and invest in their businesses and employees.”
Bill Herrle, the NFIB’s executive director in Florida, said small businesses expect the good times to keep going in the Sunshine State.
“While small business owners across the country continue to report record high optimism levels, business owners here in Florida are particularly enthusiastic as they watch Governor Ron DeSantis take the reins,” said Herrle. “Under Governor DeSantis’ leadership, Florida continues to outpace the nation in job growth, labor force growth, and record low unemployment rates, and small business owners are excited about what the future holds.”
“Owners are growing their businesses and expect that they can sell more if they can produce more with additional employees,” said NFIB Chief Economist Bill Dunkelberg. “Investment spending has been solid for the past two years and owners are choosing to invest in their workforce as well by creating new jobs and raising wages.”
“As reported in the March NFIB Jobs Report, owners have added a record high number of new employees for the past two months, only one percent (down two points) of small business owners reported reducing employment an average of 2.4 workers per firm (seasonally adjusted) in March, the lowest percentage of owners reporting reductions in survey history. Twelve percent (unchanged) reported increasing employment an average of 2.7 workers per firm. Sixty percent reported hiring or trying to hire (up three 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 five points). Twenty-one percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, only four points below the record high. Thirty-nine percent of all owners reported job openings they could not fill in the current period, up two points from February and equal to the record high set in December. A net 33 percent reported higher compensation in March, up two points,” the NFIB noted.
“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 one 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,” the NFIB added.