The National Federation of Independent Business Index of Small Business Optimism for May matched its strong performance from April of 104.5. The index, which reached near record levels in November, has been at these historically high levels for six months.
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“The remarkable surge in optimism that began last year right after the election shows no signs of slowing down” said NFIB President and CEO Juanita Duggan. “Small business owners are highly encouraged by the President’s regulatory reform agenda, and they remain optimistic there will be tax reform and health-care reform. This is a policy-driven phenomenon.”
Five of the Index components posted a gain, four declined, and one remained unchanged.
The average employment change per firm was 0.34, which puts hiring activity in May near the highest levels in the 43-year history of the Index.
A strong majority of owners, 59 percent, reported hiring or trying to hire in May, although 51 percent said they found few or no qualified workers.
Remarkably, that was a problem for 86 percent of owners who said they tried to hire. Nineteen percent of all owners in the survey said finding qualified workers was their top concern, making it the second-biggest problem for small business.
“The tight labor market has been a persistent problem for small business owners for the past several months, and the problem appears to be getting worse,” said NFIB Chief Economist Bill Dunkelberg. “It’s forcing small business owners to increase compensation, which we’re seeing in this data, to attract new workers and keep the ones they have.”
Twenty-eight percent reported plans to make capital outlays, a one-point gain from April but well below historical levels for periods of growth.