"Main Street Is On Fire Again": Small Business Confidence Surges To Highest Since 1983

While it has been accused in the past of pandering to various political organizations, the NFIB Small Business Economic Trends Survey nonetheless reflects the mood of America's main street corporations. And according to the March release of the NFIB index, small business owners are showing "unprecedented confidence" in the economy as the optimism index continues at record high numbers, rising 0.7 points in February to 107.6 and above the 107.1 expected, the second highest level in its 45-year history, second only to the 108.0 reading in 1983.

The historically high numbers include a jump in small business owners increasing capital outlays and raising compensation. The small business outlook, or the percentage of respondents saying it is a "good time to expand" and who generally view expected business conditions favorably, rose to a record high.

“When small business owners have confidence and certainty in the economy, they’re able to hire more workers and invest in their businesses,” said NFIB President and CEO Juanita Duggan. “The historically high readings indicate that policy changes – lower taxes and fewer regulations – are transformative for small businesses. After years of standing on the sidelines and not benefiting from the so-called recovery, Main Street is on fire again.”

One would almost think that America's small business federation absolutely loves the Trump administration.

And indeed, for the first time since 2006, the survey showed that taxes received the fewest votes as the number one business problem for small business. The February report shows several components of the Index reached noteworthy highs. In a sign that small businesses are confident and expect growth, a net 22 percent of owners are planning to raise worker compensation and 66 percent reported capital outlays, up five points from January and the highest reading since 2004.

Then again, as we have shown before it is one thing to think about raising compensation (or boosting CapEx); it is something entirely different to do it.

Additionally, small business owners are also expecting higher real sales rose three points to a net 28 percent, one of the best readings since 2007. Owners also reported higher nominal sales in the past three months at a net eight percent of all owners. The net percent of owners reporting inventory increases rose three percentage points to a net seven percent on top of a six-point rise in January.

“Small business owners are telling us loud and clear that they’re optimistic, ready to hire, and prepared to raise wages – it’s one of the strongest readings I’ve seen in the 45-year history of the Index,” said NFIB Chief Economist Bill Dunkelberg. “The fact that several components saw significant increases tells us that small businesses are flourishing in a way we haven’t seen in over a decade.”

Job creation remained strong in February, as reported in the NFIB February Jobs Report, released last week. Finding qualified workers remained as the number one problem for small business owners, surpassing taxes and regulations which have held the top two spots for years.

Comments

divingengineer Arnold Tue, 03/13/2018 - 07:06 Permalink

98% of the population doesn’t have any idea that the wheels are in the process of coming off as I write this.

We are at the end of this business cycle, and only now are some people feeling the supposed recovery. They are late to the game and finally getting some crumbs that the super rich have let fall. 

Poor dumb bastards think we are poised to begin another multi year rally. 

The smart money is cashing out, the dumb money is buying and a precipitous fall is in our near future. It could probably happen any time now. Maybe not till summer, but it is over folks, gird your loins.

In reply to by Arnold

numapepi Davidduke2000 Tue, 03/13/2018 - 11:58 Permalink

Regulations benefit large firms over small businesses. Large firms have entrenched staff to deal with regulatory hurdles and indeed to manipulate them to the detriment of their smaller more nimble competition. 

Less regulations and lower taxes, equal lower start up cost to birth a new business idea, which allow more diverse ideas to be tried... The creative part of creative destruction. 

 

It will be interesting to see, how the subplot of creative destruction plays out against the macro plot of the economic cycle.

In reply to by Davidduke2000

roddy6667 Tue, 03/13/2018 - 06:32 Permalink

Small business confidence is just an emotion. It is not a fact. Four out of five small business owners go bankrupt in the first five years. Of those who do not, four out of five also go bankrupt in the second five years. The ten year survival rate is 20% of 20%, or FOUR PERCENT. This is not a group of people you want to emulate.

I'm sure that lemmings feel the same way as they plunge into the sea in the "highest numbers since 1983".

numapepi roddy6667 Tue, 03/13/2018 - 12:03 Permalink

Some do succeed however, and even those that do fail yield a higher than average standard of living while they are profitable, making it a self interested thing for someone confident in him or herself to do as a means of gathering the highest standard of living for themselves possible. The average millionaire has gone bankrupt 3.5 times.

In reply to by roddy6667

D.T.Barnum Tue, 03/13/2018 - 06:36 Permalink

Wow, I took a walk around mainstreet yesterday, and it was more cracked out then ever.  People with no teeth huddled in alcoves smiling at me, bunch of latin and white men with gravely voices trying to bum cigarettes from me.  Did not give me the impression of a bustling center of commerce, the cafes were almost empty.  Go a bit down the route to walmart on the other hand....

new game D.T.Barnum Tue, 03/13/2018 - 07:18 Permalink

not to mention roads in serious arrears, a crumbling look about mpls/st paul. sure- some revitalized areas, and lots of low interest rate funded investment-conds, senior living and townhouses. a revitalized front to a crumble. downhill baby, the money was allocated for moar war- hell to pay. look at the cities in ruin-baltimore as the poster child. gutted of industry. gutted of a middle income vitality. wealth transfer. kings and paupers(serfs, minions of the state), such a great facade!!!

In reply to by D.T.Barnum

wmbz Tue, 03/13/2018 - 06:45 Permalink

"Finding qualified workers remained as the number one problem for small business owners"

How can this be?

We have the highest number of snowflakes graduating colleges, ever. So these newly minted highly educated individuals should be plentiful.

swmnguy wmbz Tue, 03/13/2018 - 07:38 Permalink

Yes, this is the constant refrain.  "We can't find qualified workers!"  They never complete the sentence, "...at the wages we're offering."

I read a story in the local paper not long ago.  A machine shop in a town of 5000 people, 2 hours drive from anything, was trying to recruit highly-skilled machinists.  They couldn't find anyone willing to move out to a rural community that doesn't have a decent grocery store, where kids have to be bused from town to town due to consolidated schools, the hospital and clinic can't handle basic procedures, etc.  The middle of nowhere.  Nice country, but not easy living.  The machine shop operator was bemoaning how Americans don't want to work, etc., etc., and how she might have to try to find foreigners on H1-B visas.  It was quite the sob story.

And then she (the machine shop owner was a woman, inherited the shop from her father) mentioned she was offering $18.50 an hour.

OK, out in rural America that's pretty high pay.  But none of their expenses are lower except maybe housing.  Not always.  If there's a small regional college in the town housing won't be any cheaper than the nearest city.

So this dumb cluck is offering 1/3 to 1/4 of what a skilled machinist can earn, to move to a place that's very inconvenient to live, and she's feeling put-upon that she can't find any takers.  I was wondering how she was in business in the first place, if that was all she was paying; she must have only hired locals who had no idea what their skills were worth in the open market.

These "newly minted highly educated individuals" are in hock up to their eyeballs to the Finance Sector, whose deal with colleges and employers creates a perfect circle of grifting.  They can't afford to work at the wages on offer.  And when wages start to adjust to the cost of living, Wall Street freaks out that it's a sign of Inflation, and we mustn't have that.  The party can only continue as long as fewer and fewer people can attend.

In reply to by wmbz

BraceforImpact Tue, 03/13/2018 - 06:52 Permalink

On what grounds?

 

Inflation is near 10% and we are so far in the hole it's literally impossible to rectify without destroying the USD.

 

If it were a legitimate private enterprise it would have gone under DECADES ago.

ThrowAwayYourTV Tue, 03/13/2018 - 07:03 Permalink

Now if we can just get rid of that chinese shit. Bought an item the other day, (Dillon beam scale.) https://www.dillonprecision.com/dillon-s-eliminator-scale_8_115_25215.h… brought it home opened the box and there it was. A "Made in China" sticker. Called the guy up and asked him if I could return it. He said "bring it right back, I don't blame you."

He said, "I have another item here (Winchester safe) https://winchestersafes.com/browse/handgun-safes/ that showed up with "Made in China" stickers all over it and as soon as the last ones gone I'm done selling them.

You want to make America great again? Get rid of the Chinese shit flooding this country. Why the hell are we worried about a chinaman having a job when theres fathers and mothers in this country waiting on tables to just get by.

BTW. I went with (Redding) http://redding-reloading.com/ Everything they make is made in the U.S.A. with U.S.A. materials including steel which comes from Pennsylvania. If they can do it so can everybody else.

ThrowAwayYourTV divingengineer Tue, 03/13/2018 - 08:26 Permalink

Most of their stuff is junk. The problem is, why are we supporting China? They're just taking American money and building a Chinese fortress with it.

I blame investors, completely. Theres no need other than greed to send my money to china. Investors, including the president and his family, all of senate and congress only care about getting rich. They dont really give a shit about you and your family here. They only care about themselves.

Oh yeah, they stand on a soapbox and scream, AMERICA THIS! and AMERICA THAT! but all they really give a shit about is getting rich by any means, including fucking the common american worker out of every penny they can.

In reply to by divingengineer

GotAFriendInBen Tue, 03/13/2018 - 07:11 Permalink

Investors in sandcastles?

Utter nonsense

Wait until the bill comes due and all those shiny new storefronts and apartments have sheriff's notices posted on the windows

Meanwhile, Trump will tweet this as some kind of success

My Days Are Ge… Tue, 03/13/2018 - 08:16 Permalink

Too many naysayers this morning.  How many writers own or operate a business.

Our 80-person company made record sales and record profits in 2017.  Design and manufacture industrial automation equipment.  Order backlog 11 months with excellent margins.

In 2018, our tax rate will drop from 34% to 21%.  The difference goes straight to the bottom line.  Building accumulated surplus to expand the plant without bank loans.

lamont cranston Tue, 03/13/2018 - 09:33 Permalink

I've made it 29+ years with never more than 13 employees and are seeing more new business in the last 12 months than the last 2-3 years combined. Use all subs anymore, including admin services. 

They all say that if they find a qualified hire, the drug test failure rate is 60-65%. 

Or, you get a millenial intern that was told to get several items for field work. Aftrer a few minutes, he came back and he found everything but one, as he couldn't find a rifle anywhere. 

That item was a sharpshooter.