The December NFIB Small Business Optimism Index dropped to 104.9, slightly lower than the near-record November report of 107.5, making 2017 the strongest year ever in the history of the survey, according to the NFIB Small Business Economic Trends Report. The average monthly Index for 2017 was 104.8. The previous record was 104.6, set in 2004.

Two of the December components posted gains, five declined, and three remained unchanged. Moving the Index moderately lower were declines in Expected Better Business Conditions (11-point decline) which tends to fluctuate sharply and Inventory Plans (8-point decline). Small business owners were bedeviled by a labor shortage in 2017 that grew more intense as optimism rose.

“We’ve been doing this research for nearly half a century, longer than anyone else, and I’ve never seen anything like 2017,” said NFIB Chief Economist Bill Dunkelberg. “The 2016 election was like a dam breaking. Small business owners were waiting for better policies from Washington, suddenly they got them, and the engine of the economy roared back to life.”