The Small Business Optimism Index increased in May to the second highest level in the NFIB survey’s 45-year history. The index rose to 107.8, a three-point gain, with small businesses reporting high numbers in several key areas including compensation, profits, and sales trends.
“Main Street optimism is on a stratospheric trajectory thanks to recent tax cuts and regulatory changes. For years, owners have continuously signaled that when taxes and regulations ease, earnings and employee compensation increase” said NFIB President and CEO Juanita Duggan.
The May report hit several records:
• Compensation increases hit a 45-year high at a record net 35 percent.
• Positive earnings trends reached a survey high at a net three percent.
• Positive sales trends are at the highest level since 1995.
• Expansion plans are the most robust in survey history.
In another interesting marker, a net 19 percent of small business owners are planning price increases, the highest since 2008 and a signal of a strong economy.
A net three percent reported positive profit trends, up four points and the best reading in the survey’s history. In addition, a net 15 percent reported higher nominal sales in the past three months, up an astonishing seven points and the sixth consecutive strong month for sales.
“Small business owners are continuing an 18-month streak of unprecedented optimism which is leading to more hiring and raising wages” said NFIB Chief Economist Bill Dunkelberg and continued:
“While they continue to face challenges in hiring qualified workers, they now have more resources to commit to attracting candidates.”