US NFIB Survey: April Optimism Index +0.1 to 104.8 - Text

     WASHINGTON (MNI) - The following are excerpts from the National Federation

of Independent Business' monthly Small Business Optimism index published

Tuesday:

     The Small Business Optimism Index sustained record-high levels increasing

to 104.8 in April, driven by reports of improved profits, the highest in the

NFIB Small Business Economic Trends Survey's 45-year history. Additionally, the

number of small businesses reporting poor sales fell to a near record low. April

is the 17th consecutive month of historically high readings, according to the

survey that was released today.

     "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."

     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 those businesses making expenditures, 43 percent are spending on

new equipment (up four points), while 27 percent are acquiring vehicles (up

three points).

     In addition, more small businesses are planning capital outlays in the next

few months, increasing three points to 29 percent. As the difficulty of finding

qualified workers continues to be a major obstacle for small businesses, with 22

percent citing it as their single most important business problem (up one

point), more of this planned spending is expected to go toward training and

labor-saving technology.

     "There is no question that small business is booming," said NFIB Chief

Economist Bill Dunkelberg. "Consumer spending, the new tax law, and lower

regulatory barriers are all supporting the surge in optimism across all small

business industry sectors."

     Small businesses are also confident in future sales growth, with a net 21

percent of owners expecting higher sales volumes (up one point). These numbers

are particularly high in the construction and manufacturing industries.

     As reported in Thursday's NFIB jobs report, the share of small business

owners who are hiring or trying to hire rose four points to 57 percent, and 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. Gains are likely to increase for many families this

year due to tax cuts.

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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