Optimism among small companies in the U.S. rose more than forecast in January, fueled by a record number of owners who said now was a good time to expand, according to a National Federation of Independent Business survey released Tuesday.
Highlights of Small-Business Optimism (January)
- Overall index rose by 2 points to 106.9 (est. 105.3), close to November’s 107.5 reading that was highest in monthly data to 1986, the survey said.
- 32% said now was a good time to expand businesses, exceeding all monthly figures to 1986 and quarterly readings back to 1973
- Net 41% expect economy to improve, up from 37% month earlier
- Six of the 10 components that make up the small-business optimism index increased in January, producing one of the strongest readings in the 45-year history of the survey.
- The figures show sustained, sturdy business sentiment since the November 2016 election. A measure of plans to boost capital spending in coming months increased by 2 points to 29 percent, consistent with other data indicating robust outlays for equipment.
- One in five small companies said they plan to boost hiring, unchanged from the prior month, as finding qualified workers remains problematic and underscores a tight job market.
The new tax law “produced the most recent boost to small-business optimism,” NFIB’s William Dunkelberg and Holly Wade said in a report. “And federal government-related cost pressures continue to abate, offering a more supportive business climate for small firms. Consumer spending remains supportive, and business spending and housing remain strong.”
- 34 percent of NFIB respondents reported job openings in January, up from 31 percent a month earlier
- Share of owners raising average selling prices rose to a net 11 percent, the highest since July 2014, from 8 percent
- Plans to add to inventories rose to a net 3 percent
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