Small businesses have a sense of optimism which hasn’t been seen by the 45-year-old National Federation of Independent Businesses (NFIB) index.
The 108.8 record high was set in August of 2018, which is part of a 24-month positive trend the likes of which the NFIB hasn’t recorded. This led the NFIB to ask what exactly is driving this optimism in a new infographic aptly titled, “Small Business Optimism Soars.”
For small businesses operating in this current environment, the news is more than welcomed after the financial crisis of 2007/2008. And this optimism is shared by a large number of business owners across the country who are experiencing the windfall from the Trump administration’s tax reforms and deregulations.
NFIB President and CEO Juanita D. Duggan, addressed this very issue in the report for the infographic, including what must be done by policymakers to continue on this path.
The NFIB wants Congress to further eliminate regulations which still hold many small businesses back while making tax relief a priority for a segment which contributes tens of millions of jobs and trillions of dollars to the US economy.
Duggan said, “Congress must continue this progress, including protecting the tax cuts that have made a significant difference for thousands of small businesses across the country.”
She adds, “We look forward to welcoming the 116th Congress and continuing to work together to advance policies that allow our nation’s small businesses to remain strong.”
Takeaways From the Infographic
The infographic starts by saying, “Smart policy changes lead to months of positive outlook.”
The NFIB’s Small Business Optimism Index is based on seasonally adjusted of 10 survey indicators. For the past 24 months, the index has experienced record high levels, which culminated with the 108.8 number for August.
The optimism was driven by the relief small businesses are getting from the tax reform. Eighty percent of owners also agree the tax reform will have a positive effect on the general economy.
Regarding the deregulations, the Trump administration was responsible for cutting the total number of pages in the Federal Register from 95,894 to 61,308, a decline of 36%. This makes it the lowest it has been since 1993.
The Effect of the Policy Changes
Small business owners have been reporting these policy changes are responsible for real-world growth.
Owners said the changes have created more jobs, increased capital spending, bulked up inventories, reported higher earnings, and raised compensation.
For members of the NFIB, which is comprised of business in all 50 states and Washington D.C., things have really improved in the past couple of years.
Duggan said, “Our members say that business is booming and prospects continue to look bright.”