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Certainty certainly near top of most business wish lists

There’s no mystery about what nearly all business owners and managers, especially those in retail, want for Christmas: more sales. But second on the list for most owners and managers likely is more certainty. They’d like to know with more assurance that slow, but steady, economic growth really will continue in 2012. They’d also like to get a handle on how government regulations will affect their operations.

The results of a recent survey speak volumes about the ongoing effects of uncertainty on small business owners and, in turn, the prospects for job growth that’s essential to more robust recovery.

Fully 61 percent of small business owners responding to a survey conducted by the National Federation of Independent Business (NFIB) Research Foundation cited uncertainty as an impediment to growth.

The vast majority of owners — 83 percent, in fact — think of uncertainty in economic terms. Will improving business and labor conditions and increased consumer confidence contribute to more sales and higher profits?

There’s some good news in that regard. The latest version of an annual economic forecast prepared at the University of Colorado predicts slow, but steady, growth in Mesa County as well as the state in 2012. In the Grand Valley, the forecast cites rising wages and expanding energy activity as indicators of improving conditions. The statewide outlook is much the same with continued recovery in most industry sectors and the anticipated addition of 23,000 net new jobs. And just in time for the holidays, a national measure on consumer confidence surged more than 15 points in November to reflect more cheer than fear.

But at the same time, the NFIB survey found that 51 percent of small business owners who consider uncertainty an impediment blame politics. More specifically, 40 percent of owners identified regulatory or legal issues as an impediment to growth. And 25 percent of those who cited regulations as a burden said they either cancelled a project scheduled for the next six months or abandoned altogether a project or investment.

Here, the prospects are less favorable. Consider as a prime example the potential implications of federal health care reform legislation that’s been enacted, but since has come into question on the basis of its constitutionality.

If the Supreme Court doesn’t reject the law in part or entirety, mandates will require businesses with 50 or more employees to offer government-approved health coverage or pay a penalty. The legislation also imposes a cornucopia of new taxes on everything from small tanning businesses to large pharmaceutical manufacturers and health insurers.

Regulatory uncertainty translates into economic uncertainty. Richard Wobbekind, the author of the annual CU economic outlook, says as much:

“So you continue to have all of these elements of uncertainty and they impact consumer confidence and household spending. That is something that is very hard to forecast or predict.”

Conversely, it’s easy to predict what small business owners and managers want for Christmas. Here’s hoping they receive just what they want — more sales and, ultimately, more certainty.

The Business Times has served as the definitive source for Grand Junction business news since 1994. The journal offers news, views and advice you can use twice each month in print with daily updates online at www.TheBusinessTimes.com
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Posted by on Dec 6 2011. Filed under Editorials. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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