Small business optimism continued to be favorable in March, sustaining a trend that has been playing out since November. The numbers come from the Small Business Economic Trends Report issued by the National Association of Independent Business Owners (NFIB).rm future.
The NFIB said the Index slipped 0.6 points in March to 104.7, which was still a strong reading. Actual earnings, capital expenditure plans and job-creation plans posted gains in March.
Sales expectations, however, had been high for months but dropped by eight points, a sign that the Optimism Index could be moderating after the strong run.
NFIB Chief Economist Bill Dunkelberg said that by historical standards, the report indicated an excellent performance, with most Index components holding their gains. “The increases in capital expenditure plans and actual earnings are signs of a healthier economy, and we expect job creation to pick up in future months,” he said.
Dunkelberg emphasized that despite the strength reflected in the Optimism Index, there was a significant increase in the Uncertainty Index. That could mean trouble ahead. The Uncertainty Index is a subset of data on how small business owners see the near-term future.
“The Uncertainty Index hit 93 in March, which is the second highest reading in the survey’s history,” Dunkelberg said. “More small business owners are having a difficult time anticipating the factors that affect their businesses, especially government policy.”
Most of the March data were collected before Congress failed to repeal and to replace Obamacare. The NFIB said the soaring optimism during the past five months was a result of expectations among small business owners that Obamacare and other burdensome policies would be reversed.
NFIB President and CEO Juanita Duggan said small business owners remain optimistic about the future of the economy and the direction of consumer confidence. Duggan said the April data (due out in May) will indicate better how small business owners are processing the events in Washington.