The National Federation of Independent Business (NFIB) said that the Small Business Optimism Index edged up from 105.2 in July to 105.3 in August, its highest level since February. The headline index has rebounded from June’s 103.6 pace, which was a post-election low—albeit one that still represented a highly positive outlook. Overall confidence remained not far from January’s assessment (105.9), with was a 12-year high. To illustrate the boost in optimism seen over the past 12 months, the headline index stood at 94.4 one year ago. Along those lines, the percentage of respondents suggesting that the next three months would be a “good time to expand” increased from 23 percent to 27 percent. In August 2016, just 9 percent said the same thing.
The percentage expecting sales to increase over the next three months also ticked higher in August, up from 22 percent to 27 percent. While this was lower than the 31 percent seen in December, which was its highest level since October 2005, it continued to be a very strong reading. One year ago, it was slightly negative. Likewise, the percentage planning to make a capital expenditure in the next three to six months rose from 28 percent to 32 percent, its best reading in 11 years.
The hiring data remained encouraging despite easing a little in August. The net percentage planning to add workers in the next three months inched down from 19 percent, its strongest reading since December 1999, to 18 percent. Demonstrating recent tightening in the labor market, 52 percent of those completing the survey said that there were few or no qualified applicants for job openings, which was unchanged the prior release.
The top “single most important problem” was taxes (20 percent), highlighting the need for comprehensive business tax reform. The quality of labor (19 percent) and government regulations and red tape (16 percent) also topped the list.