Good news, everyone: confidence is up. Not personal confidence, though it could be. (And why not? That new thing you're doing with your hair really seems to be working.) The confidence in this case is small business confidence, which according to a report from the National Federation of Independant Business ticked up to in the month of February. According to the organization, their Index of Small Business Optimism rose to 98.0, the third-highest rating since early 2007. The index polls a cross section of small business owners and factors ten components into its ratings, including those small business' plans to increase employment or capital outlays, whether they expect the economy to improve, and how their earnings are trending. The largest increase came in the number of owners who reported having hard-to-fill openings, which rose 3 percent from the previous report.
The report cites the inability of the small business sector to "pull its weight" during the recovery process as a factor in slowing the employment recovery. Fortunately, the NFIB reports that their data indicates that small businesses are beginning to add more jobs than they eliminate, a positive sign for future growth. Another sign of improvement is the reporting that credit remains readily available for small businesses, as just 3 percent of owners reported that their credit needs were not met. Capital outlays were also up for sixty percent of owners, which also rates as the strongest showing in the category since 2007. And owners reported the fourth consecutive month of increasing inventories, which marks the first period of consecutive positive gains since (you guessed it) 2007.
As with most economic reports post-Great Recession, the news isn't positive across the board. The number of owners reporting increased sales over the past three months as compared to the three months prior dropped 3 points. And the number of owners expecting positive gains for the period dropped by a point to 15 percent. But the overall forecast seems to be trending upward, as the NFIB report summarizes:
There are fundamental domestic economic currents leading owners to add workers and these should bubble up in the official statistics and support stronger growth in domestic output.
You can read the entire report here.