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Small Business Optimism Index Is Third Highest in Survey’s 45-Year History

JEFFERSON CITY, Oct. 9—The NFIB Small Business Optimism Index continued its historic 23-month positive trend with a reading of 107.9 in September—the third highest in the survey’s 45-year history. 

State-specific data is unavailable, but overall, 2018 has produced 45-year record high measures of job openings, hiring plans, actual job creation, compensation increases (actual and planned), profit growth, and inventory investment.

“I think the survey shows that entrepreneurs are a lot less worried these days about the federal government coming in and making it harder for them to grow their businesses,” NFIB State Director Brad Jones said.

The September survey showed:

-Actual capital spending in the past few months rose significantly.

-Average employment change per firm was solid.

-Owners bulked up inventories.

-Compensation increases set a new record.

“This is the longest streak of small business optimism in history, evidence that tax cuts and regulatory rollbacks are paying off for the economy as a whole,” said NFIB President and CEO Juanita D. Duggan. “Our members say that business is booming and prospects continue to look bright.”

Actual investment spending improved as prospects for the economy remain strong. Sixty percent of owners reported capital outlays, up four points from August.  Of those making expenditures, 41 percent reported spending on new equipment (up two points), 26 percent acquired vehicles (up four points), and 16 percent improved or expanded facilities (down two points).

Consumer spending temporarily slowed in August, likely producing excess inventories but has picked up again which will reverse the build-up. The net percent of owners expecting higher real sales volumes rose three points to a net 29 percent of owners. Owners reporting inventory increases rose one point to a net five percent (seasonally adjusted).  Strong expectations for higher real sales translate into higher expected returns on capital investments as well as a need for more employees.

“The economy continues to deliver a spectacular performance for one so near its record length. Small business owners continue to face labor force challenges but are increasing compensation to keep up,” said NFIB Chief Economist Bill Dunkelberg.

A record net 37 percent of owners reported raising overall compensation, as reported in last week’s NFIB monthly jobs report. This surpasses the previous record of a net 35 percent in May 2018. Twenty-four percent plan to increase total compensation at their firm and six percent plan reductions. Sixty-one percent of owners reported hiring or trying to hire, with 87 percent of those reporting few or no qualified workers. Thirty-eight percent of owners reported job openings they could not fill in the current period, unchanged from last month.

About the Small Business Economic Trends

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are drawn from a random sample of NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in July 2018. For more information about NFIB, please visit