Analysts at NBF Economics and Strategy explained that the latest iteration of the NFIB Small Business Survey was released this morning.
“It showed the optimism index rose to 106.9 in January, i.e. just a shade below November’s 30-year high (107.5). No less than 41% of polled businesses considered that present economic conditions were conducive to expansion, a new all-time high. In such a good context, 20% of firms were planning to hire new staff while 29% were contemplating rising capital spending, elevated percentages by historical standards.
Only one problem remains: labour shortages. Indeed, 34% of respondents reported positions they were unable to fill in January, the third highest reading in 17 years. What’s more, poor quality of labour moved ahead of taxes as small businesses’ most important problem in the first month of 2018, the first time it occurred since the early 2000s.
True, the fiscal reforms passed into law in Washington might have helped reducing tax burden for enterprises, but the fact remains that qualified labour is growing scarcer by the day. With so many firms hunting for a diminishing pool of potential employees, an acceleration of wage growth cannot be ruled out.
To be sure, fully 24% of firms were already planning to enhance their net compensation plans in the near future according to the NFIB, the highest percentage since December 1989.”