Small Business Confidence Struggles Continue
The National Federation of Independent Business (NFIB) this morning reported a rise of 1.9 points in its small business optimism index, from 88.9 in January to 90.8 in February. The NFIB noted that the index is "on a par" with the average in 2008. The uptick in confidence, while positive, does not indicate a "surge in confidence among small-business owners."
The NFIB's chief economist said:
While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed. Far more firms report sales down quarter over quarter than up. Washington is manufacturing one crisis after another - the debt ceiling, the fiscal cliff and the sequester. Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship. Three-quarters of small-business owners think that business conditions will be the same or worse in six months. The Index gained almost 2 points last month; that was good news. But, until owners' forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy.
Weak sales are the top problem for 18% of business owners surveyed by the NFIB, with 19% reporting higher sales and 33% reporting lower sales over the past three months.
According to the survey, 44% of business owners tried to hire new employees in the past three months and 34% reported "few or no qualified applicants for open positions." Only 4% of businesses expect to hire more employees, but that is an improvement of three points, which suggests that job creation and unemployment numbers may improve "modestly."
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