Small businesses are feeling very positive these days. According to the National Federation of Independent Businesses (NFIB), this optimism has reached record-breaking levels.
A recent NFIB report showed that August's Small Business Optimism Index came in at an all-time high of 108.8. The previous index record was 108 and was set 35 years ago in July 1983.
BREAKING: The NFIB #SmallBiz Optimism Index soared in August to 108.8 – the highest in the survey’s 45-year history. Read the full report:
— NFIB (@NFIB) September 11, 2018
Juanita Duggan, the President and CEO of NFIB, said in a press release that the amazing number was a clear indication that business in the US is indeed booming, a claim that many small business owners have reaffirmed.
There were also several key points that the August index survey revealed, like:
- Inventory investment plans were the most stable since 2005. Meanwhile, capital spending plans are at the highest peak since 2007.
- New records have also been set with regards to job creation and unfilled job openings.
- The number of small company owners who said it was a good time to expand tied with the record high seen in May 2018.
Duggan also stated that as taxes and regulations were changed, small companies also adjusted their business plans and expectations.
“We're now seeing the tangible results of those plans as small businesses report historically high, some record-breaking, levels of increased sales, investment, earnings, and hiring,” Duggan explained.
The NFIB president also pointed out in an earlier report, most of the optimism seen in the index was due to the component gains generated by expectations. For instance, expectations regarding business conditions, real sales, and even when would be a good time for businesses to expand.
Small business optimism is at the highest level on record. pic.twitter.com/m1y9EvK70X
— Michael R. Strain (@MichaelRStrain) September 11, 2018
However, the new report highlights real industry activities, like capital spending plans, inventory investment plans, and job openings. This data, based as it is on real activity, shows that higher GDP growth is on the horizon.
While the Optimism Index is confirming facts that people want to hear, it also showed problem areas. For instance, companies are still having difficulty securing qualified workers. About 90 percent of businesses trying to fill a position have reported they found very few to no qualified applicants. What's more, the percentage of firms who might offer a higher salary remained unchanged at 32 percent while businesses who planned to give employees a pay raise dropped to a low 21 percent.
[Featured image via Pexels]