Small business owners were more optimistic in April, according to the National Federation of Independent Business’ monthly survey. The NFIB Small Business Optimism Index rose from 92.5 in March to 94.5 in April, its highest level since December 2007 (the month that the recession officially started). Consistent with this improvement, measures for earnings, sales, and capital expenditure plans were higher. Moreover, more small business owners planned to increase hiring in April compared to February and March, which is welcome news.
Despite the positive news, it is important to note that small business owners remain uncertain about the economy. Of those saying that the next three months are not a “good time to expand,” the economy remains first and foremost in their minds. The net percentage of those wanting to expand in the next three months is still below its pre-recessionary levels.
Interestingly, the top concern is no longer “poor sales,” as a proxy for economic woes. This is the first time since August 2008 that “poor sales” was not on top. It was replaced by “government regulations and red tape” with 20 percent. “Poor sales” was second with 19 percent, and “taxes” was third with “18 percent.”
Chad Moutray is chief economist, National Association of Manufacturers.