If you are expecting an economic downturn, changes are you aren’t involved with a small business.
Contradicting what it calls “the conventional story line that the recovery is losing steam,” the National Federation of Independent Businesses reports in a new survey that small business operator optimism soared to a record high in August. The 108.8 score on the NFIB index topped the record of 108 set all the way back in 1983.
“Stock indices are hitting new highs as the economy keeps producing good numbers. New heights of small business optimism contradicts the conventional story line that the recovery is losing stream, that we should prepare ourselves for the downturn,” the NFIB declared in commentary about its latest monthly report.
“Worriers focus on the role of FAANG [Facebook, Amazon, Apple, Netflix, Google] stocks driving the market higher. But recently, the Russell 2000, a ‘small company’ stock index began posting record gains as well, based on very favorable profit reports for small businesses. The ‘small cap’ companies in the Index are much larger than NFIB members, but their experience mirrors the record reports of rising profits among NFIB members. The small business engine continues to roar with the dramatic change in economic policies since November 2016.”
The survey dates back 45 years.
Data is not broken down by state, but North Carolina NFIB State Director Gregg Thompson pointed out in a statement: “The survey clearly shows that our small-business members believe the economy is strong and that it will stay that way for the foreseeable future.”
The optimism as the economy tops 3 percent in gross domestic product growth and unemployment dips under 4 percent reflects findings in the American Institute of Certified Public Accountants quarterly survey released last week. A similar survey from Duke University is due to be published soon.
And small businesses continue to hire additional workers – IF they can find them.
Key findings in the survey include:
- A record 25 percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 2 points).
- Thirty-eight percent of all owners reported job openings they could not fill in the current period, a new survey record high.
- Seventeen percent reported using temporary workers, up 4 points.
- A seasonally-adjusted net 26 percent plan to create new jobs, up 3 points from July and a survey record.
- Job creation plans and unfilled job openings both set new records.
- The percentage of small business owners saying it is a good time to expand tied the May 2018 all-time high.
- Inventory investment plans were the strongest since 2005 and capital spending plans the highest since 2007
- A net 10 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months compared to the prior three months, up two points.
- August was the ninth consecutive strong month of reported sales gains after years of low or negative numbers.
“Today’s groundbreaking numbers are demonstrative of what I’m hearing every day from small business owners – that business is booming. As the tax and regulatory landscape changed, so did small business expectations and plans,” said NFIB President and CEO Juanita Duggan in a statement. “We’re now seeing the tangible results of those plans as small businesses report historically high, if not record-breaking, levels of increased sales, investment, earnings, and hiring.”
Read more from the report online.