Confidence is at a ninth-month low for the nation's small business owners, according to today’s report from the National Federation of Independent Business.
Confidence among small business owners has hit a nine-month low, reversing modest gains realized earlier in the year, according to data released today by the National Federation of Independent Business.
“All in all, this month’s survey was a real economic downer,” William Dunkelberg, the federation’s chief economist, said in a statement. “The economy has definitely slowed.”
The June Index of Small Business Optimism fell three points to 91.4, the lowest level since October 2011, the federation said in a statement. The June index is based on a survey of 740 randomly sampled small business owners who are federation members.
Nearly one-in-four business owners surveyed identified weak sales as their most significant business problem, while 21 percent cited taxes and 19 percent, government red tape, according to the survey.
Political uncertainty emerged as one of the key factors weighing down small business confidence, according to the index. The share of business owners who expect sales to increase dropped by 5 percent in June, for a four-month decline of 15 percent, falling into negative territory of minus 3 percent.
“Expectations this weak are not likely to generate job creation or inventory investment,” the federation said. In comparison, a five-year high of 4 percent was recorded in the April index and a cyclical low of negative 34 percent was recorded in July 2009.
The share of business owners planning to add jobs dipped into negative territory – less than negative 1 percent - for the first time since December. Overall, June’s results suggest the unemployment rate will rise, the federation said.
The share of business owners planning to spend on capital improvements fell 3 points to 52 percent. According to the federation, “Overall, the stats on capital expenditures are consistent with the sluggish performance of the economy.”
The June index does not include the reactions of business owners to the U.S. Supreme Court decision upholding the constitutionality of the Patient Protection and Affordable Care Act. According to the federation, the tax implications of the law for business owners remain unclear and “uncertainty reigns supreme for much of Main Street.”