Small Business Confidence Skyrockets to a 3-Year Peak Following Election
Small business confidence saw a dramatic surge in November, with the NFIB Small Business Optimism Index leaping eight points to 101.7. This milestone marks the first time in 34 months that the index has surpassed its 50-year average of 98. This is the highest reading since June 2021, primarily fueled by optimism in the aftermath of Donald Trump’s presidential victory.
The most significant improvement was observed in expectations for economic conditions, which climbed 16 points to 52%. This indicates a soaring confidence level among business owners. Out of the 10 optimism index components, nine saw an increase with none experiencing a decrease. Meanwhile, the Uncertainty Index dropped 12 points from October’s record high of 110 as business owners gained more certainty about future policy directions.
Small business owners demonstrated an increased willingness to expand operations. A total of 14% believe it’s a good time to expand their business. This is an eight percentage point increase from the previous month and the highest reading since June 2021.
Capital expenditure plans also experienced a rise, moving to 28% from 22% in October. This is the highest level since January 2022. Entrepreneurs are anticipating a more favorable regulatory and tax environment under the incoming administration.
Source: National Federation of Independent Business