April Small Business Optimism Show Power of Tax Reform

The National Federation of Independent Business’ (NFIB) most recent Small Business Optimism Index shows just how powerful and positive of an impact the Tax Cuts and Jobs Act (TCJA) is already having for America’s small businesses. Here are some highlights:

  • The Index saw “sustained record-high levels” (for the 17th month in a row) largely driven by “reports of improved profits, the highest in the NFIB Small Business Economic Trends Survey’s 45-year history.”
  • The “frequency of positive profit trends went up three points in April due to gains in operating productivity and stronger sales as well as the newly implemented tax law.”
  • Reports of capital outlays “rose three points this month to 61 percent, indicating that small businesses are confident and strong enough to make investments.”
  • Of the businesses making expenditures, “43 percent are spending on new equipment (up four points), while 27 percent are acquiring vehicles (up three points).”
  • The “share of small business owners who are hiring or trying to hire rose four points to 57 percent.”
  • New job creation “remains at historically strong levels, with a net 16 percent of owners planning to create new jobs.”
  • Significantly “more new businesses are opening than closing, providing a major boost to new employment.”
  • Worker compensation “remains at the highest level since 2000, with net 33 percent reporting increasing compensation.
  • The average family “saw wages and salaries grow last year,” and gains “are likely to increase for many families this year due to tax cuts.”

“Never in the history of this survey have we seen profit trends so high”, said NFIB President and CEO Juanita Duggan. “The optimism small businesses owners have about the economy is turning into new job creation, increased wages and benefits, and investment.” NFIB Chief Economist Bill Dunkelberg added: “There is no question that small business is booming. Consumer spending, the new tax law, and lower regulatory barriers are all supporting the surge in optimism across all small business industry sectors.”