Small business optimism is at one of its highest levels in 43 years. Anticipation mounts for policy changes from the U.S. government in regards to health care law, tax reform and regulatory relief, according to the National Federation of Independent Business (NFIB) Small Business Optimism Index.
“It is clear from our data that optimism skyrocketed after the election because small business owners anticipated a change in policy,” said NFIB president and CEO Juanita Duggan. “The sustainability of this surge and whether it will lead to actual economic growth depends on Washington’s ability to deliver on the agenda that small business voted for in November. If the health care and tax policy discussions continue without action, optimism will fade.”
Nearly half of small business owners expect conditions to improve in the near term. Though the index fell slightly in February, it follows an increase in January and the largest month-over-month increase in the survey’s history in December, NFIB said.
Recording the first positive reading since early 2015, business owners reporting high sales improved four percentage points. Those expecting higher real sales fell three points, but the category remains positive after a 20-point gain in December.
Capital spending was up, reaching the second-highest reading since 2007. New equipment, vehicles and improvement or expansion of facilities led the items for capital outlays. Small businesses are ready to invest, Duggan said.
“Small businesses will begin to turn optimism into action when their two biggest priorities, health care and small business taxes, are addressed,” she said. “To small business, these are both taxes that need reform. It is money out the door that strangles economic growth.”
– Adam Fusco, editorial associate