The Small Business Optimism index rose 0.8 points in October, recovering a large part of September’s hurricane-related 2.3-point drop as expectations for sales improved and more business owners feel now is a good time to expand, explained analysts at Wells Fargo.
“The National Federation of Independent Business (NFIB) Small Business Optimism rose 0.8 points in October to 103.8, essentially regaining a little more than one-third of the prior month’s drop. The September data were likely impacted by Hurricane Harvey and Hurricane Irma, which devastated parts of Texas and Florida – two states where small businesses are particularly prominent.”
“The NFIB survey suggests that the aftermath of the late summer hurricanes is still weighing on small businesses somewhat but the impact is diminishing.”
“The labor market is becoming increasingly tight for many small businesses. While the proportion of business owners stating they plan to add staff in the next three months fell 1 point to 18 percent, the series is running even with its average for the past six months and is near its high for this cycle. Moreover, 59 percent of business owners stated they either hired or tried to hire workers during October. Unfortunately many business owners are having difficulty finding qualified workers.”
“The proportion of business owners that stated the next three months were a good time to expand their business rose 6 points to 23 percent. While that did not bring the series back to its prior high of 27, reached in August, the series remains slightly above its average for the past six months and is consistent with solid economic growth.”
“One of the more significant shifts this past year is the decline in the proportion of firms stating that burdensome regulations are their most important problem. Lessening regulatory headwinds have likely contributed to the uptick in capital spending which may have more room to run.”
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