Confidence at U.S. Small Companies Increases to 14-Month High

Confidence among U.S. small businesses climbed in April to a 14-month high as companies said they planned to boost hiring and spending, a survey found.

The National Federation of Independent Business’s optimism index rose to 94.5, the highest since February 2011, from 92.5 the previous month, the Washington-based group said today in a statement. Six of the measure’s 10 components increased.

“Job creation plans, job openings and capital spending plans all increased,” William Dunkelberg, the group’s chief economist, said today in a statement. “Hopefully this performance will hold in the coming months.” Still, economic “and employment growth news has not been good,” he said.

More small company leaders said they plan to expand, even as national employment growth has slowed in recent months. The world’s largest economy added 115,000 jobs in April, the smallest gain in six months.

A net 5 percent of small-business owners said they planned to hire over the next three months, up 5 percentage points from March, the report showed. The share of owners projecting higher sales, adjusted for inflation, eased two points to 6 percent, and a net minus 12 percent said earnings trends were positive, an increase of 11 points from March.

Some 25 percent, up 3 percentage points from March, said they planned to invest in new equipment.

The survey’s net figures are calculated by subtracting the percent of business owners giving a negative answer from those with a positive response and adjusting the results for seasonal variations.

Business Expectations

The gauge of expectations for improved business conditions six months from now rose 3 points to a net minus 5 percent. A net 7 percent of businesses thought it was a good time to expand, the same as in March.

The NFIB report was based on responses from 1,817 small- business owners through April 30. Small companies represent more than 99 percent of all U.S. employers, according to the U.S. Small Business Administration. A small business is defined as an independent enterprise employing as many as 500 people.

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net