Owners of U.S. small businesses started the year feeling better about their prospects, a survey showed Tuesday.
The National Federation of Independent Business said its index of small-business optimism rebounded after a small decline at the end of last year, rising to 104.3 points in January from 102.7 in December.
“2020 is off to an explosive start for the small business economy, with owners expecting increased sales, earnings, and higher wages for employees,” said NFIB Chief Economist William Dunkelberg. “Small businesses continue to build on the solid foundation of supportive federal tax policies and a deregulatory environment that allows owners to put an increased focus on operating and growing their businesses.”
The net percent of owners expecting higher real sales volumes increased 7 points to 23 percent with owners a bit more certain of future sales growth prospects. The share saying that now is a big time to expand rose 3 points to a net 28 percent.
There was good news for labor in the report as well. Twenty-six percent of owners reported finding qualified workers as their number one problem, 1 point below August’s record high. Fifty-six percent reported hiring or trying to hire, but 49 percent reported few or no “qualified” applicants for the positions they were trying to fill. That could be a recipe for higher wage gains since employers bid up wages to poach those with jobs when they cannot easily fill positions.
“Finding qualified labor continues to eclipse taxes or regulations as a top business problem. Small business owners will likely continue offering improved compensation to attract and retain qualified workers in this highly competitive labor market,” Dunkelberg said. “Compensation levels will hold firm unless the economy weakens substantially as owners do not want to lose the workers that they already have.”