This year’s election results boosted optimism among small business owners about where the economy is heading, according to national survey released yesterday.
“What a difference a day makes,” said Juanita Duggan, president and CEO of the National Federation of Independent Business, which has measured business optimism monthly since 1986. “Before Election Day small business owners’ optimism nationally was flat, and after Election Day it soared.”
Last month, NFIB conducted separate surveys pre- and post-election for the first time. The full November index improved 3.5 points to 98.4, rising above its 42-year average for only the third time since 2007.
“The November index was basically unchanged from October’s reading up to the point of the election and then rose dramatically after the results of the election were known,” said NFIB chief economist Bill Dunkelberg. “Even without separating the data, the November results paint a starkly different picture than what we’ve seen in the last 94 months,” he said. “If higher optimism can be sustained, I expect that in the coming months we’ll see an increase in business activity, such as hiring and expanding.”
The survey asks small business owners a battery of questions related to their expectations for the future and their plans to hire, build inventory, borrow, and expand.
Asked if they expected business conditions to improve, respondents saying yes went up by 19 percentage points, from net negative seven to positive twelve. Plans to hire new employees jumped five points from the previous month. The percentage who expected higher sales rose from a net one percent in October to net 11 percent in November.
Pre- and post-election numbers showed sharper differences. Job creation plans increased from a net nine percent through November 8th to a net 23 percent after the election. Expected higher sales rose 16 points, from a net four percent to a net 20 percent. Expected better business conditions, the biggest mover in the survey, rose 44 points from a net -6 percent to a net 38 percent.
It’s too soon to know whether California’s small businesses will share the optimism seen nationally, said Tom Scott, NFIB’s California state executive director, given what he called “a hostile small business climate” in the state.