Small business optimism has eclipsed pre-shutdown levels, increasing 1.5 points to 105.0 in May, according to the Small Business Optimism Index compiled by the National Federation of Independent Business.
Six components surveyed in the index improved, three were unchanged and one dipped.
The data indicates optimism at historically high levels, according to the NFIB. The index had dipped during the longest federal government shutdown in U.S. history, lasting from Dec. 22, 2018, to Jan. 25. During the shutdown, Great Smoky Mountains National Park remained open as volunteers staffed visitor centers when rangers in noncritical positions were furloughed.
“Small business owners are demonstrating a continued confidence in the strength of the economy and are betting capital spending dollars on it,” NFIB Chief Economist William Dunkelberg said in a news release Tuesday. “This solid investment performance is supporting ongoing improvements in productivity and real wages.”
Business owners reporting capital outlays increased six points to 64%, the highest reading since February 2018. Thirty percent plan capital outlays in the next few months, up three points and historically high. Plans to invest were most frequent in transportation (45%), manufacturing (39%), professional services (39%) and construction (31%).
The net percent of owners expecting higher real sales volumes rose three points to a net 23% of owners. Thirty percent say now is a good time to expand, a five-point increase. The frequency of reports of positive profit trends improved two points to a net negative 1%.
As reported in the May NFIB Jobs Report, small business owners added a net addition of 0.32 workers per firm, with 25 percent citing the difficulty of finding qualified workers as their Single Most Important Business Problem, matching the record high.