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NFIB: 'Record Level' of Small Businesses Are Boosting Profits

NFIB: 'Record Level' of Small Businesses Are Boosting Profits
(Marek Uliasz/Dreamstime)

By    |   Tuesday, 08 May 2018 05:51 PM

U.S. small businesses increased hiring and profits amid a record-level of optimism in the economy.

The National Federation of Independent Business (NFIB) said its 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.

“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.”

Reports of capital outlays rose 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, while 27 percent are acquiring vehicles.

In addition, more small businesses are planning capital outlays in the next few months, increasing to 29 percent.

“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.”

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,” more of this planned spending is expected to go toward training and labor-saving technology.

“Businesses are looking for workers in just about every nook and cranny of the economy,” Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters.

And some economic storm clouds could be on the horizon for some small businesses.

When President Donald Trump signed a $1.5 trillion package of tax cuts at the end of 2017, supporters predicted businesses would respond this year with a burst of hiring and investment.

But Reuters interviews with more than a dozen small to mid-sized manufacturing executives and recent U.S. economic data reveal Trump's protectionist trade policy is starting to lead some of them to take a more cautious approach, and forcing them to put new investment and hiring plans on hold.

While these manufacturers lauded the administration's push to make U.S. businesses globally competitive through measures such as the tax overhaul and a deregulation drive, they complained that the steel and aluminum tariffs along with the escalating trade spat with China were undercutting those benefits.

Trump has proposed a separate 25 percent import tariff on some 1,300 Chinese products to try to force changes in Beijing's intellectual property practices.

The steel and aluminum import tariffs imposed in March were designed to protect the American industries and its workers from global overcapacity and unfair trade practices. Trump justified the measure saying protecting the industries was important to the country's national security. He argued that the tariffs would re-open closed mills, sustain a skilled workforce, and maintain or increase production.

But the tariffs, which came into effect on March 23, have driven up raw material costs and caused supply delays, rendering the manufacturers' "Made in the USA" products uncompetitive against their foreign rivals, according to these manufacturing company executives.

(Newsmax wire services contributed to this report).

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U.S. small businesses increased hiring and profits amid a record-level of optimism in the economy.
nfib, small, business, profits, hiring
Tuesday, 08 May 2018 05:51 PM
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