"Small-business confidence saw an uptick this last month, but it was a ho hum, yawn, at-least-it-didn’t-go-down reading.”
Optimism over short-term business conditions boosted small business confidence in April to a six-month high, according to the Small Business Optimism Index released Tuesday by the National Federation of Independent Business.
The index rose 2.6 points to 92.1, just above the recovery average of 90.7. The Index has see-sawed over the last several months. After three months of slow, but sustained growth, it dropped in March.
Of the 10 components that comprise the index, Plans to Increase Employment, Plans to Increase Inventories, Expect Economy to Improve and Expect Real Sales Higher rose. Plans to Make Capital Outlays and Expected Credit Conditions dropped, while Current Inventory, Current Job Openings, Now a Good Time to Expand, and Earnings Trends were unchanged from the previous month.
While the index showed improvement, the NFIB curbed its enthusiasm. “Small-business confidence saw an uptick this last month, but it was a ho hum, yawn, at-least-it-didn’t-go-down reading,” said NFIB chief economist Bill Dunkelberg. The NFIB report further cited that while the component Expect Economy to Improve gained 13 points, the reading was still in negative territory (-15 percent),
April was another positive, albeit lackluster month for job creation, the NFIB said. Job creation plans rose 6 points to a net 6 percent planning to increase total employment. Small employers reported increasing employment an average of 0.14 workers per firm, the fifth positive sequential gain.
The net percent of all owners reporting higher nominal sales in the first quarter of 2013 compared to the fourth quarter of 2012 rose 3 points to a negative four percent, the best reading in 10 months, although there are still more firms reporting declines than those reporting gains. Sales expectations improved 8 points from March to a net four percent.
Only four percent of small businesses surveyed characterized the current period as a good time to expand, unchanged from last month and historically a very weak number, the NFIB reported. Of those who said it was not a good time to expand, 62 percent cited “economic conditions” and 24 percent cited “the political climate.”
When asked to identify their top business problem, 23 percent cited taxes, 21 percent cited regulations and red tape and 16 percent still cited weak sales. Only 2 percent reported financing as their top business problem.
The April NFIB Small Business Optimism Index is based on the responses of 1,873 randomly sampled small businesses in NFIB’s membership.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.