Small business owner confidence firmed last month, according to new data from the National Federation of Independent Business (NFIB). Specifically, the headline optimism index rose to 106.9 in January, a larger gain that expected and one of the highest readings in the 45-year history of the NFIB surveys. Under the hood, six of the ten main components that make up the sentiment gauge improved last month, with much of the strength concentrated in surveyed owners’ opinions of earnings trends and business expansion plans. Small business job creation also remained historically strong in January, with notable hiring plans reported by firms in the construction, manufacturing, transportation, communication, and professional services sectors.
Filling vacancies, though, is still a major challenge for many small businesses, as evidenced by the near-record 49 percent of owners that complained last month about there being few or no qualified applicants for open positions. Unsurprisingly, a net 24 percent of surveyed owners said that they plan to raise worker compensation in response to tighter labor markets, the highest reading since December 1989, and almost a third of respondents said they are boosting compensation to attract or retain employees. Moreover, quality of labor for the first time ever became the top-cited problem facing small business owners, and NFIB President and CEO Juanita Duggan added that “Since 2013, taxes and regulations have been the top two issues for small business, and Washington delivered relief from regulations and taxes in 2017. Businesses are now looking for qualified workers as they plan to expand.”
Sources: NFIBPost author: Charles Couch