A survey of small business owners showed a record number of them believe that now is a good time to expand.
About a third of small business owners say now is a good time to expand, according to NFIB’s Small Business Economic Trends Survey, the strongest level of that measure of confidence seen since the NFIB began its survey in 1973.
The organization’s Small Business Optimism Index was up two points to 106.9 in January, also one of its highest numbers historically. The survey measures 10 seasonally adjusted indicators, including whether owners have plans to make capital outlays, have plans to increase inventory, and expect higher sales.
In addition to the 32 percent of owners who said it’s a good time for expansion, many small business owners also said they actually plan to – with plans to make capital outlays up two points and plans to increase inventories up four points in the survey.
Actual earnings also were reported to be good. Small business reported earnings 11 points higher than in December, the highest since 1988.
More than 4 in 10 (41 percent) said they expect the economy to improve, up four points from December.
“Main Street is roaring,” NFIB President and CEO Juanita Duggan said in a statement. “Small business owners are not only reporting better profits, but they’re also ready to grow and expand. The record level of enthusiasm for expansion follows a year of record-breaking optimism among small businesses.”
NFIB Chief Economist Bill Dunkelberg said at least some of the bullishness is due to Congress and the Trump Administration passing a tax cut, and a sense that Washington Republicans are reducing regulations.
The survey also found that worker pay by small business owners is up, reaching its highest level on the index since 2000.
With expansions on the horizon, the limiting factor is now finding enough help.
“Finding qualified workers now exceeds taxes and regulations as the top concern for small businesses,” said Duggan.
More than half of small businesses (55 percent) reported hiring or trying to hire in January but almost 9 out of 10 of those who said they tried to hire reported they had either no qualified applicants, or very few. More than 1 in 5 said (22 percent) said finding qualified help was their biggest concern, up three points from the previous month, more than cited taxes or regulations.
The percentage of owners who reported raising their prices was up to a net 11 percent (seasonally adjusted), the highest price inflation reading since the summer of 2014, NFIB said. Nearly 1 in 4 (23 percent) said they plan price hikes.
The overall economy, beyond small businesses, may be a little less exuberant, though still showing strong growth. The Atlanta Federal Reserve put out its latest unofficial GDP growth forecast last week, predicting first quarter 2018 real GDP growth of 4 percent.