Small business optimism rose in January to its highest level since the first term of Pres. George W. Bush (December 2004), providing proof that the “stunning climb in optimism” since Pres. Trump’s election is real, the latest National Federation of Independent Business (NFIB) Index of Small Business Optimism reveals.
“The stunning climb in optimism after the election was significantly improved in December and confirmed in January,” said NFIB President and CEO Juanita Duggan. “Small business owners like what they see so far from Washington.”
The Index rose 0.1 points to 105.9 in January, an increase of 0.1 points, following the largest month-over-month increase in the survey’s history in December.
The recent growth in optimism looks similar to the surge in the Index in 1983, which was followed by years of economic prosperity, NFIB reports:
“As these very positive expectations transition into spending and hiring plans, and then into actual reports of more spending and hiring, economic growth will begin to outperform 2016.”
Nearly half (48%) of small business owners expect the economy to improve, and a third (31%) have job openings they need to fill.
Still, NFIB warns that the current economic still faces challenges, such as hostile regulations, left over from the Obama Administration:
“Although many economists claim that President Trump is inheriting a ‘strong economy,’ government statistics beg to differ. GDP grew only 1.9 percent in the fourth quarter of 2016 and an average of 1.6 percent for the entire year.”
“This is the result of eight years of poor economic policies and gridlock in Congress. Congress now has the opportunity to undo harmful, anti-growth policies. For small-business owners, the success or failure to produce positive results will be reflected in future reports measuring small business optimism and their hiring and spending activity.”
Indeed, “Taxes” and “Government Regulations and Red Tape” ranked as the top two biggest problems, respectively, for small businesses in January.
But, now, after eight years of struggling with government barriers, small business owners are finally hopeful that policy proposals from the new administration and Congress will spur economic growth in a similar manner, Duggan said.
“We’ve had very low growth for years, mainly because small businesses have been tied down by regulations, taxes, and spiraling health insurance costs,” but “Now they can see relief on the horizon, and they are much more optimistic about the future.”