Confidence among U.S. small businesses climbed in May to a one-year high as the economic outlook over the next six months brightened.
The National Federation of Independent Business’s optimism index increased to 94.4, the highest since May 2012, from 92.1 in April. Eight of the measure’s 10 components contributed to the improvement, the Washington-based group said.
The share of business owners expecting sales to increase improved by 4 percentage points to 8 percent in May, and those looking for economic conditions to pick up through the rest of the year rose 10 points. Still, fewer companies planned to add to payrolls.
“Pessimism about the economy and future sales did moderate,” William Dunkelberg, the group’s chief economist, said in a statement. At the same time, “planned job creation fell a point and reported job creation stalled after five ‘up’ months.”
The NFIB report was based on a survey of 715 small-business owners through May 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 with no more than 500 employees.