Small business owner confidence softened last month, according to a new report from the National Federation of Independent Business (NFIB). Specifically, the headline optimism index ended November at 104.8, the third monthly decline in a row, the largest decrease since March, and the worst reading in more than half a year. Under the hood, eight of the ten main components that make up the sentiment gauge deteriorated in November, with most of the weakness concentrated in owners’ outlooks for sales growth and the overall economy. Despite the broad declines, most metrics remain at historically strong levels that suggest business activity should continue to expand in the year ahead.
Moreover, a net 22 percent of owners said that they plan to create new jobs during the next three months, close to the best reading of the current economic cycle, and one in four survey respondents said that they will boost worker compensation, the highest reading since 1989. The latter is not too surprising because 87 percent of the owners trying to add staff recently complained about there being “few or no” qualified applicants for the positions they were trying to fill. A record 25 percent of respondents also cited “quality of labor” as the top problem facing their business at the moment. The report’s authors added that “As a banner year comes to an end, small business owners have shown that when taxes and regulations fade as a major concern for their business, they will invest in their business and employees. The biggest concern facing small businesses going into the holiday season and next year is finding qualified employees for the positions they've created.”
Post author: Charles Couch