According to a report conducted measuring the optimism index by The National Federation of Independent Business small businesses are looking very promising for the month of October. In the index it shows that the level of optimism has risen by 0.8 points from September’s 94.1 though is still fall short of the index’s average of 98 out of 42 years. The index is determined through four criteria which are job creation, job openings, capital spending plans and inventory investment. The job creation and capital spending plans have stayed flat by 10% and 27% respectively but the job openings and inventory investment plans have rose by 28 and 9 points respectively.
A quarter of small business owners have reportedly raised their employee’s wages in the past 3 months. 19% of other businesses have plans on raising their employees’s pay within the next 3 months. Bill Dunkelberg, chief economist of the NFIB has said “The first guess at GDP growth for Q3 was 2.9 percent, a marked improvement over the prior four quarters. But prospects for the fourth quarter are not promising, auto sales are weakening, housing supply is constrained, inventories are still a bit excessive, and consumer sentiment has been declining. Businesses are not inclined to be investing in new plant and equipment, not knowing where already high marginal tax rates might go.”
The NFIB also reports that 28% of businesses have vacant positions open and that 48% say there are no or very few qualified applicants for these positions a statistic that hasn’t not changed from the previous month. The greatest concern according to business owners are taxes or government regulations by 21% each and quality of labor taking third place by 15%. Financing/interest rates and the inflation rate are the lowest concern according to business owners as well representing 2% and 1%.