Index: Small business owners more upbeat

A monthly measure of optimism among small business owners has increased for a sixth consecutive month despite mixed outlooks for economic conditions, staffing, sales and earnings.

The National Federation of Independent Business Reported that its Small Business Optimism Index advanced four-tenths of a point to 94.3 in February. With gains in each of the last six months, the index has climbed to its second highest reading since December 2007, the beginning of the recession.

“The good news for small business owners and those watching the economy is that things are getting better. However, at this slow pace of growth and recovery, it could be years before we are again enjoying prosperity,” said Bill Dunkelberg, chief economist for the NFIB. “The price of gasoline is a wild card, and rising energy costs will weigh heavy on the minds of small firm owners.”

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy organization. The proportion of small business owners responding to the survey upon which the February index was based who expect business conditions to improve over the next six months actually fell three points to a net negative 6 percent.

A seasonally adjusted net 4 percent of owners said they plan to increase staffing, down a point. Meanwhile, 17 percent of owners reported unfilled job openings, also down a point.

The share of owners reporting capital expenditures over the past six months rose two points to 57 percent. But the proportion of owners planning capital expenditures over the next three to six months fell a point to 23 percent.

A net 12 percent of owners expect sales volume to increase, up two points. Still, 22 percent of owners cited poor sales as their top business problem. Reports of positive earnings trends gained five points in February.

Even at a net negative 19 percent, the reading has climbed to its highest level since October 2007. The proportion of owners planning to increase inventories bounced back five points to a net 2 percent of all firms.

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Posted by on Mar 13 2012. Filed under Business News, Trends. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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