US NFIB Survey: August Optimism Index +0.1 to 105.3 - Text

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

of Independent Business' monthly Small Business Optimism index published

Tuesday:

     The percentage of small business owners planning to make capital

expenditures in the next three to six months reached its highest level since

2006, according to the National Federation of Independent Business (NFIB) Index

of Small Business Optimism, released today.

     "This is a sign of economic health that we've been expecting based on the

soaring optimism that began last year," said NFIB President and CEO Juanita

Duggan. "Higher optimism resulted first in higher employment activity, and now

we're seeing more small business owners making capital investments."

     The NFIB Index rose 0.1 points to 105.3. Five of the components increased,

while five declined. The lofty reading keeps intact a string of historically

high performances extending back to last November.

     "Consumer demand is very strong, and the regulatory relief has been

dramatic," said Duggan. "Small business owners still expect progress on tax

reform and healthcare, and they will be watching closely."

     According to NFIB Chief Economist Bill Dunkelberg, the August figures for

capital outlays are typical of a growing economy.

     "Small firms are now making long-term investments in new machines,

equipment, facilities, and technology," he said. "That's a real sign of

strength, and it will be interesting to see if the August result becomes a

trend."

     Plans to make capital outlays were most common among professional services

firms (46 percent), followed by manufacturing (38 percent), wholesale trades (36

percent), agriculture (33 percent), and construction (33 percent).

     A net 27 percent of small business owners expected better sales in August,

a five-point gain over the previous month. That matches the number of owners who

said it's a good time to expand, a four-point jump from July.

     Job creation plans dipped by one point but remain historically high. Job

openings slid four points, a sign that more business owners are slowly filling

positions in the midst of a serious shortage of skilled labor.

     "Consumer demand is driving optimism, and optimism is driving business

activity," said Duggan. "Substantial regulatory relief is also a big factor

because it creates a much more hospitable business climate."

     Optimism Components:        Seas Adj Level %        Change

     JOB CREATION PLANS                18 (NET)          -1

     CAPITAL EXPENDITURE PLANS         32                 4

     INVENTORY PLANS                    2 (NET)          -3

     JOB OPENINGS                      31                -4

     INVENTORY SATISFACTION            -5 (NET)          -3

     GOOD TIME TO EXPAND               27                 4

     EXPECT BETTER BUSINESS CONDITIONS 37 (NET)           0

     SALES EXPECTATIONS                27 (NET)           5

     EXPECT EASIER CREDIT CONDITIONS   -3 (NET)           1

     ACTUAL EARNINGS TRENDS           -11 (NET)          -1

     INDEX OF SMALL BUSINESS OPTIMISM 105.3            -0.1

--MNI Washington Bureau; +1 212-800-8517; email: sara.haire@marketnews.com

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