The other two big movers in the survey, “Sales Expectations” and “Good Time to Expand,” jumped by 20 percentage points and 12 percentage points, respectively.
“This is the second consecutive month in which small business owners reported a much brighter outlook for the economy and higher expectations for their businesses,” said Dunkelberg. “In this month’s report, we are also finding evidence that higher optimism is leading to increased business activity, such as capital investment.”
Sixty-three percent of respondents made capital outlays, an eight-point increase over November. Also, the net percent of owners reporting inventory gains increased six points.
“Business owners are feeling better about taking risks and making investments,” said Duggan. “Optimism is the main ingredient for economic expansion. We’ll be watching this trend carefully over the next few months.”
Despite sharply higher optimism, hiring activity remained flat in December. Job creation increased by 0.01 workers per firm and job openings dropped two points. According to the NFIB Jobs report, released last week, finding qualified workers remains a persistent problem for small business owners.
“The labor market is getting tighter,” said Dunkelberg. “That’s good news for workers because they can command higher compensation, but many small business owners aren’t yet confident enough to raise prices to offset the higher labor costs. Owners are still in a pinch, but the overall picture for December was very positive.”
