Small Business Owners Confident to Start 2017

Small Business Owners Confident to Start 2017

An index operated by the National Federation of Independent Business (NFIB) that tracks optimism among small business owners has hit its highest point since the end of 2004.

Small Business Owners Confident to Start New Year

The NFIB has offices in all 50 state capitals and Washington D.C., and has a nationwide membership base of over 325,000 small business owners.

Small businesses, defined as companies with less than 500 employees, make up over 99% of all employers in the United States, and the NFIB survey was based on the response of 619 small business owners.

Largest One-Month Increase in Small Business Owners’ Confidence Since 1980

The index jumped 7.4 points in December 2016, from 98.4 to 105.8, the largest one-month increase since 1980. According to the association, seven of the ten components the index examines increased in December 2016, mainly due to upbeat expectations for sales and the economy.

More small business owners think now is a good time to expand, according to the data, a ratio, in fact, three times the average share seen during the current economic expansion. More companies also plan to increase investment and continue bringing on employees, emboldened by the new administration’s anticipated efforts in deregulation, infrastructure spending, and tax reform.

Half of the respondents expect better business conditions in the next six months, a fraction 38% higher than in November 2016.

Juanita Duggan, NFIB’s president and chief executive, sees a small business landscape primed for a breakout, which bodes well for the U.S. economy.

As small business owners feel more secure in taking risks and making investments, investor confidence continues to drive U.S. equities higher and higher. All three of the Dow Jones, S&P 500 and Nasdaq rose each day in the second week of January, a feat that hasn’t happened since September 2011. Many of the popular indices are at or near all-time highs, reflecting the nation’s strong overall current economic forecast.

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