Positive attitudes among small business owners have hit historic highs, the National Federation of Independent Businesses (NFIB) reports in its June 2018 small business optimism index. The optimism is being driven by robust sales figures and profit margins.
NFIB Small Business Optimism Index June 2018
According to the NFIB, the index for June was the sixth highest ever at 107.2. The unprecedented high numbers started in December 2016, with the index averaging 105.4, above the 45 year average of 98.
The all-time high was in 1983 when the index hit 108.0, and if the economy keeps performing at its current pace, it won’t be long before this record goes by the wayside. For small business owners, this is a great time to seek new opportunities, expand and even get funding.
In the report, NFIB President and CEO Juanita Duggan echoes the optimism small businesses are apparently feeling. Duggan explains, “Small business owners continue to report astounding optimism as they celebrate strong sales, the creation of jobs, and more profits. The first six months of the year have been very good to small business thanks to tax cuts, regulatory reform, and policies that help them grow.”
Data for the NFIB Small Business Optimism Index is gathered from the NFIB membership by the NFIB Research Foundation. The index has been conducted since 1973, and for 45 years it has provided valuable insights into how small business owners feel about the state of their companies and the economy as a whole. The NFIB now counts more than 350,000 small and independent business owners across the US in its membership.
Data From the June Index
The June index also shows the strongest nominal sales small businesses have experienced in years, according to the NFIB. A net 10% of all small business owners participating in the index have reported higher nominal seasonally adjusted sales in the past three months. This makes June the seventh consecutive month with strong sales reports.
NFIB Chief Economist Bill Dunkelberg attributed the growth to regulatory relief and the new Tax Cuts and Job Act. Dunkelberg says he expects this will push profits for small businesses even higher in the coming months.
Business owners also plan to invest in more inventory, create new jobs, and increase wages for their workforce, Dunkelberg adds.
In its report, the NFIB makes some predictions about how the small business community will act upon its record optimism.
The report concludes, “Small business owners are pushing ahead with an expansive agenda, trying to figure out how to produce more with a restricted supply of labor. Unemployment is about as low as it can go. Mortgage rates and inflation are both still historically low, and incomes are rising.”
The report also suggests economic growth will remain solid for small businesses through the end of the year.
You can download the full June 2018 Report: Small Business Optimism Index report here (PDF).