Small business owners and operators across the United States are in high spirits following the results of the Nov. 5 election — at least if the latest data coming from a National Federation of Independent Business (NFIB) survey is any indication.
Overall, the NFIB Small Business Optimism Index climbed eight points during November to rest at 101.7, the highest figure since June 2021. This result follows a consecutive 34-month spell wherein the index was unable to meet the 50-year average figure of 98.
Post-Election ‘Euphoria’ in Evidence Among US Small Business Owners
With Reuters outlining that small business owners in the United States tend to lean Republican and that those same entrepreneurs were demonstrating at least some degree of “post-election euphoria” following former President Donald Trump’s win, it seems that NFIB survey respondents were pleased about their future economic prospects.
“The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners,” said NFIB Chief Economist Bill Dunkelberg.
“Main Street also became more certain about future business conditions following the election, breaking a nearly three-year streak of record high uncertainty. Owners are particularly hopeful for tax and regulation policies that favor strong economic growth as well as relief from inflationary pressures. In addition, small business owners are eager to expand their operations,” Dunkelberg added.
The survey details painted a more compelling picture. A full nine of the total 10 index components increased, and one remained static — however, none decreased. Most striking was a 41-point improvement regarding the net percentage of owners expecting the economy to improve (to a net 36% from negative territory prior). This is the highest sentiment ranking on the question of overall economic health since June 2020.
Other notable survey results included the following:
- The net percentage of small business owners and operators who felt it was now a good time to expand their business was boosted by 8% to a net 14% in total. This figure represents the highest reading on this metric since June 2021.
- The net percentage of small business owners who projected higher real sales volumes also made a turnaround from negative territory to strong positive ground, ticking upward by 18 points to settle at 14%, seasonally adjusted. This is the highest figure achieved within this index category since February 2020.
- A full 28% of those polled (seasonally adjusted) plan capital outlays over the next 12 months — the highest result since January 2022.
Some Concerns Persist Among American Entrepreneurs
Not everything is entirely rosy, however.
According to Bloomberg, citing NFIB data, inflation continues to be a persistent problem. A full 28% of respondents indicated they were planning to raise prices to keep up with increased costs sometime in the next three months.
Furthermore, a weaker labor pool may be contributing to job vacancies for small business operators. Despite 18% of those polled saying they expected to create jobs over the next three months, nearly half of respondents (48%) reported difficulty in finding qualified talent to fill existing positions.
Those small businesses planning to offer wage increases hiked upward by 5 points to sit at 28%, as Reuters reported, the highest rating of the year. The motive? Solving the aforementioned problem of finding appropriate labor.
“Wage hikes are necessary to maintain current employment and hopefully to help fill vacancies,” said Dunkelberg.
