Another datapoint which supports a nascent recovery across business size in the US. Should this continue, it will drive outperformance to lower cap securities as we have been positing. While always subject to revision, this is yet another peice in the outlook.
(Bloomberg) Confidence among U.S. small businesses rose in November to the highest level since the recession began three years ago as more companies projected the economy and sales will improve, a private survey found.
The National Federation of Independent Business’s optimism index increased to 93.2, the highest since December 2007, from an October reading of 91.7. Seven of the index’s 10 components rose and three declined. The measure averaged 100.7 during the previous expansion.
The gauge of expectations for better business conditions six months from now rose to the highest level since June 2005, jumping 8 points to 16 percent in November, the report showed.
The measure of hiring plans over the next three months rose three points to a net 4 percent, according to the NFIB report. Nine percent of businesses said they intend in increase staff, up one percentage point from the prior month. Fewer indicated they plan to cut payrolls, with 12 percent anticipating workforce reductions, down from 13 percent in October.
At the same time, the sales trends are not yet “supportive of a widespread recovery in the small business sector even if a bit stronger than October,” Dunkelberg said. Weak sales continued to be businesses’ top problem, with 30 percent of respondents listing it as their main concern.
“The historically high percent of owners who cite weak sales means that, for many owners, investments in new equipment or new workers are not likely to pay back,” Dunkelberg said. “This is a major cause of the lack of credit demand observed in financial markets.”
Here's a 5yr snapshot of the index:
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