Grim attitudes toward sales and employment prospects hold down optimism Index.
Small-business optimism gained 0.8 points in September, the National Federation of Independent Business announced today, but “there is little among the 10 Index components than can be considered a ‘positive,’ it said in a statement. The optimism Index rose to 88.9 last month from 88.1 in August on a scale of 100.
“The key to economic recovery is restoring the confidence of consumers; only then will small businesses begin to see the sales they need to expand,” NFIB Chief Economist Bill Dunkelberg said.
The uptick in small-business optimism ends a six-month decline. Reports of owners expecting real sales to improve were higher than in August, but they remain negative. The reading for owners expecting better business conditions in six months also showed a modest increase, but also remained negative.
More than a quarter (28 percent) of small-business owners reported as they have for the past three years that poor sales is their primary business problem. The net percent of owners expecting better business conditions in six months was a -22 percent, up four points from August, but 32 percentage points lower than January.
The employment picture remained bleak in September. The Labor Department last week announced that the economy added 103,000 new jobs in September, but 45,000 of these were returning Verizon workers who had been on strike.
Fourteen percent of small-business owners reported unfilled job openings, down 1 percent from August. Eleven percent plan over the next three months pkan to increase employment (unchanged) while 12 percent plan to reduce their workforce (also unchanged). This yielded a seasonally adjustment 4 percent of owners planning to create new jobs, also down 1 point from August. In a typical expansion, the NFIB said, this Index component has double digit readings.
Fewer small-business owners, too, are investing in their businesses as weak sales continue to depress the small-business economy.
They are not very confident that President Obama’s job plan will succeed, according to an investor survey Millionaire Corner conducted in September. Only about 23 percent believe it will produce the desired results, while less than 7 percent even believe that the president and Congress will work together to produce a workable bipartisan plan.
This is consistent with attitudes expressed in another Millionaire Corner survey conducted last summer in which just about 16 percent of business owners said they were confident that the employment situation would improve within the year,
Just under a third believe they will be better off financially in one year. Small-business owners under 40 have the most optimism, while those over the age of 60 are the most pessimistic.