Small business optimism reached record highs in February as companies continue to benefit from lower taxes and less regulation, the National Federation of Independent Business said in its latest monthly Small Business Economic Trends Survey.
The NFIB's Index of Small Business Optimism was at 107.6 in February, up from 106.9 the previous month, which had already been one of the highest levels in the 45-year history of the survey. Seven of the 10 components registered a monthly increase, one declined and two were unchanged.
According to the survey, taxes received the fewest votes as the most pressing problem for small businesses, a first in 12 years. Business owners are also spending capital, with a net 22% of respondents planning to raise worker compensation and 66% reporting capital outlays, the highest reading in 14 years.
Expectations of higher real sales increased by 3 points to a net 28%, one of the best readings since 2007. Companies also recorded higher nominal sales in the past three months at a net 8% of all owners. Meanwhile, the net percentage of owners reporting an increase in inventory climbed by 3 points to a net 7% after a 6-point increase in January.
"When small business owners have confidence and certainty in the economy, they're able to hire more workers and invest in their business," NFIB President and CEO Juanita Duggan said. "The historically high readings indicate that policy changes — lower taxes and fewer regulations — are transformative for small businesses. After years of standing on the sidelines and not benefiting from the so-called recovery, Main Street is on fire again," she added.
"Small business owners are telling us loud and clear that they're optimistic, ready to hire, and prepared to raise wages — it's one of the strongest readings I've seen in the 45-year history of the Index," NFIB Chief Economist Bill Dunkelberg said. "The fact that several components saw significant increases tells us that small businesses are flourishing in a way we haven't seen in over a decade."
