Tuesday, January 13, 2015

Small Business Optimism Rose Above Long-Run Average

The NFIB Small Business Optimism Index gained 2.3 points in December, rising to 100.4, the highest level since October 2006. The Index increase was broad based, as eight of the ten indices posted gains, compared to November when just two of the ten indices contributed to the gain. The top two categories were Expect Real Sales Higher and Now is a Good Time to Expand. Expectations for the economy to improve declined and the index for current inventory was unchanged.

Plans for job creation posted a 4 point gain, increasing December’s net gain to a seasonally adjusted 15%, one of the stronger readings in NFIB history. The index for expected real sales increased 6 points to 20% of business owners expecting gains, following the 5 point gain in November. The percent of owners who think the next three months are a good time to expand increased 5 points to a seasonally adjusted 16%, a significant increase after the index component was flat for November and decreased 2 points in October.

Taxes remained the single most important problem for small businesses, followed by government regulation and red tape. Financing and interest rates remained the least cited concern.

Read the NFIB report.

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