Index: Small businesses in “maintenance mode”

A monthly measure of confidence among small business owners has edged up, but continues to reflect what one economist described as “maintenance mode” for the sector.

The National Federation of Independent Business reported that its Small Business Optimism Index inched up a tenth of a point in July. But at 94.6, the index remains below its historical average of 98.

“Small business optimism was pretty much unchanged during the month of July, and small businesses continue to be in maintenance mode,” said Bill Dunkelberg, chief economist of the NFIB. “Uncertainty is high, expectations for better business conditions are low and future business investments look weak. Our data indicates that there is little hope for a surge in the small business sector anytime soon.”

Juanita Duggan, president and chief executive officer of the NFIB, said small business optimism has been missing for 89 out of the last 91 months. “Without that optimism, small business owners will not invest, borrow or create jobs.”

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group, most of them business owners. For July, four of 10 components of the index advanced, four retreated and two remained unchanged.

The portion of small business owners responding to the survey upon which the July index was based who expect the economy to improve rose four points. But at a net negative 5 percent, more owners still anticipate worsening than improving conditions.

The share of owners planning to increase capital outlays over the next three months slipped a point to 25 percent. A net 8 percent of owners said they consider now a good time to expand, unchanged.

A net 12 percent of owners reported plans to increase staffing, up a point. Meanwhile, 26 percent of owners reported hard-to-fill job openings, down three points.

The share of owners planning to increase inventories rose three points to a net 0 percent. The portion of owners who consider current inventories two low remained unchanged at a net negative 4 percent.

The share of owners who said they expect higher sales inched down a point to a net 1 percent. The proportion of owners reporting higher earnings fell a point to a net negative 21 percent.

Asked to identify their most pressing business problems, owners most frequently cited government regulations, taxes and difficulty finding qualified workers.

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Posted by on Aug 10 2016. Filed under 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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