Small business optimism retreated from its 35-year high in February, but remains among the highest in survey history, the National Federation of Independent Business said Tuesday.

“It has been a remarkable 16 months for small business optimism,” said NFIB President and CEO Juanita Duggan. “This is the first time in 35 years where the fewest number of small business owners have told us that taxes are their number one business problem. They’ve been so optimistic that they feel confident enough to raise wages and invest in their business, which grows the economy.”

The Small Business Optimism Index slipped to 104.7 in March from 107.6 in February. The index remains in the top 5% of the reading in its 45-year history.

About 20% of respondents said they expect to create jobs, while 28% said now is a good time to expand.

Respondents expecting better business fell to 32% from 43%, while expected sales fell to 20%, according to the index.

“Although expected sales and expected business conditions posted large declines, it was from historically high levels and this still left the overall Index reading among the 20 best in survey history,” said NFIB Chief Economist Bill Dunkelberg. “Hiring and spending on new buildings and land acquisition remained at strong levels, a good sign of confidence in economic prospects.”

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.