Confidence among small business owners is up for the second consecutive month, representing another good sign that the economy is in recovery stages.
The most recent Small Business Optimism Index, released by the National Federation of Independent Businesses (NFIB), reports that the overall optimism index rose 2.3 points to 94.4 in May, representing the second consecutive month of growth. The monthly index is calculated from 715 surveys sent to member companies of the NFIB.
Business owners are surveyed on 10 components concerning their current business and expectations for the future, and these are compiled to create the Optimism Index. The index is currently at its second-highest point since the recession began. During May, 8 of those 10 components showed gains from the previous month, including “Expect Real Sales Higher,” “Current Job Openings,” “Now a Good Time to Expand” and “Expect Economy to Improve.” The latter component saw the most month-to-month gain, rising 10 points from April.
Citibank’s Small Business Pulse echoes the small business optimism, reporting that nearly half of owners — 48 percent — rated conditions for their business as good or excellent during May, which is up from 43 percent the year before. The study also shows that 25 percent of owners plan to hire new full-time employees during the next year, half expect annual sales to grow in 2013, and 54 percent expect that 2014 will be even better.
These recent reports come with a plethora of good news for small businesses coming out during the first half of this year, including news that the Thomson/Reuters Small Business Index rose in April for the first time in 2013. The rise indicates that more small businesses are receiving loans. Increases in the numbers of loans to small businesses tends to signal a positive sign for the economy, as these businesses tend to respond to changes in the economy faster than larger companies.
The news from small business owners is in line with another report stating that Americans in general are more optimistic about the economy than they have been since the recession began. This news comes from a CBS News/New York Times poll showing that 39 percent of Americans say the economy is now good, which is the highest that number has been since December 2007.
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