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Macro Flash Report

NFIB Small Business Optimism

 

Takeaway:

November’s NFIB Small Business Optimism index reached its highest level in nearly 3 and a half years. This sharp move higher is an encouraging signal for next year’s activity in the industrial/manufacturing space.

 

NFIB Small Business Optimism & Uncertainty Index

 

In November, the NFIB Small Business Optimism soared to 101.7, coming in above the 50-year average of 98 for the first time in 34 months and reaching the highest level since June 2021. This follows a 93.7 reading in October and exceeds forecasts of

94.6. Additionally, the Uncertainty Index dropped by 12 points to 98 as future business conditions become clearer following the election.

Other key findings include:

  • The main driver for this increase was the net percent of owners expecting the economy to improve surging to 36% (+41 points), the highest since June 2020. Furthermore, small business owners believing it is a good time to expand their business increased to 14% (+8 points), the highest since June 2021.
  • Owners expecting higher real sales volumes jumped to 14% (+18 points), the highest since February 2020.
  • The frequency of reports of positive profit trends was a net -26% (+7 points), the least negative reading of the year.
  • 28% (+6 points) plan capital outlays in the next six months, the highest reading since January 2022.
  • Inflation remained their single most important problem in operating their business at 20% (-3 points), surpassing labor quality as the top issue by 1 point.
  • 36% (+1 point) of all owners reported job openings they could not fill in the current period.