The economic and retail sales growth expectations of independent auto dealers have improved substantially, according to the National Independent Automobile Dealers Association's business confidence survey for the fourth quarter of 2017. The survey of NIADA members is conducted each quarter in partnership with Equifax to gauge their mood regarding general economic and business conditions. Fifty percent of the dealers surveyed said they expected economic conditions to improve in the first quarter, up from 36 percent in the third quarter survey. Retail sales growth expectations improved to 67 percent from 55, and the number of dealers who expected to increase their inventory investment this quarter rose. The big drivers of that renewed dealers’ optimism include expectations of tax relief, positive consumer sentiment due to the lowest unemployment rate in more than 30 years and confidence in the current administration's pro-growth, anti-regulation policies. That inflationary inventory situation continues to put pressure on the business expense side of the ledger, which is one reason 57 percent of dealers expected their cost of doing business to increase, up from 45 percent in the third quarter. That jump also reflects the significant investment independent auto dealers continue to make in their digital showroom – as reflected in the survey, which shows 56 percent planned to increase their digital marketing spend. The expectation of rising expenses also showed up in dealers' perception of the single most important problem facing their business – 25 percent said it was the increased cost of doing business, by far the most popular choice. It was followed by heightened competition from franchise dealers (17 percent) lack of customer prospect traffic/leads and lack of quality retail inventory (12 percent). Government regulations/red tape, usually one of the most popular responses, was near the bottom of the list at 6 percent. The overall picture shows NIADA members expected business to improve heading into the new year, optimism bolstered by strong 3.9 percent holiday retail sales growth – well above the 10-year average of 2.6 percent – as well as rising wages, stock market strength, increasing employment and a generally positive economic outlook.