A measure of optimism among U.S. small-business owners rose to a record and exceeded projections as companies planned the most capital spending since 2007 and hiring intentions hit an all-time high, a National Federation of Independent Business survey showed Tuesday.

Highlights of Small-Business Optimism (August)

• Sentiment index rose 0.9 point to  108.8 (est. 108), the highest since tracking began in 1974 and exceeding the prior peak in September 1983, the National Federation of Independent Business survey showed
• Capital spending plans were the  highest since 2007 while inventory investment intentions were the strongest since 2005
• A seasonally-adjusted net  26% of owners plan to increase employment, also a record

Key Takeaways

Small businesses are increasingly optimistic as the economic expansion enters its 10th year and the Trump administration prioritizes industry deregulation and tax cuts. Companies have been boosting inventories to match robust consumer demand for goods and services.

“The small business engine continues to roar with the dramatic change in economic policies since November 2016,” survey authors William Dunkelberg and Holly Wade said in the report.

While the gauge of intent to hire reached a record, finding qualified workers remains a problem. Of companies trying to fill a position in the month, 89 percent reported finding few or no qualified applicants. At the same time, reports of higher compensation were unchanged at a net 32 percent of firms and plans to raise pay decreased 1 point to a net 21 percent.

Other Details

• A record 25% of owners cited “quality of labor” as the single most important problem facing their company
• 34% said now is a good time to expand business, up two points from prior month
• Businesses that expect higher real sales down 3 points to 26%
• Six of 10 index components increased from the prior month