Small business confidence in the economy dropped for the sixth staight month according to a monthly National Federation of Independent Business survey.
Poor sales and a fractious political environment have helped to further shake small business confidence in August. The Small-Business Optimism Index, a monthly report issued by the National Federation of Independent Business, dropped for the sixth straight month to 88.1, the lowest level since March 2010.
The August survey, based on interviews conducted in July with more than 920 small business owners, reflected dissatisfaction with the tumultuous debt ceiling debate and down-to-the-wire compromise. “Private sector decision makers think longer term and they don’t like what they see,” said NFIB Chief Economist Bill Dunkelberg in a statement. “There is little clarity or certainty. When people are uncertain about the future or fear it, they don’t spend or invest.”
Business owners are considered to be the engine of economic growth. But that engine is stalling. The net percent of owners expecting better business conditions in six months was down 11 points from July and 36 percentage points lower than January The net percent of owners expecting better business conditions in six months was a negative 26 percent, down 11 points from July, and 36 percentage points lower than January.
The net percent of owners expecting better business conditions in six months was a -26 percent, down 11 points from July. Only five percent characterized the current period as a good time to expand facilities, down one point and three points lower than January. Over the next three months, 11 percent plan to increase employment (up 1 point) and 12 percent plan to reduce their workforce (up 1 point), yielding a seasonally adjusted 5 percent of owners planning to create new jobs -- a 3 point gain over July.
Millionaire business owners and entrepreneurs have shared similar national and personal concerns with Millionaire Corner. In a wealth level study conducted earlier this year, 81 percent said they were most concerned about the national debt. Compared to other occupation segments, they were most likely to express dissatisfaction with tax increases (77 percent), the prolonged economic downturn (76 percent) and inflation (73 percent).
Of the 58 percent of Millionaires concerned about maintaining their financial position, 70 percent were business owners. They were also understandably significantly more likely than investors overall to express concern about their business revenues (67 percent) and an increase in interest rates (61 percent).
In another Millionaire Corner survey conducted this summer, business owners were most compelled to action. They comprised the highest percentage of investors overall who said they were going to reduce their spending and increase their saving (nearly 60 percent). But they also expressed the most doubt that that the employment situation would improve over the course of the year. Of the 48 percent who expressed this attitude, nearly 62 percent were business owners.