Small business optimism index retreats

After six straight months of gains, a measure of optimism among small business owners has declined on less upbeat expectations for hiring and sales.

The National Federation of Independent Business reported that its Small Business Optimism Index retreated nearly two points to 92.5 in March.

With gains in each of the previous six months, the index had climbed to its highest level since December 2007, the beginning of the recession.

The index is based on the results of monthly surveys of members of the NFIB, a small business advocacy organization based in Washington, D.C.

“March came in like a lion with Main Street seeing significant job growth. … But it appears to have gone out like a lamb, and with no cheer in the forward-looking labor market indicators. What could have been a trend in job growth is more likely a blip,” said Bill Dunkelberg, chief economist for the NFIB.

All 10 components of the Small Business Optimism Index fell in March.

The proportion of small business owners responding to the March survey who expect the economy to improve over the next six months fell two points to a net negative 8 percent.

A seasonally adjusted net 0 percent of owners said they plan to increase staffing,  down four points.

At the same time, though, 15 percent of owners reported unfilled job openings, down two points.

The share of owners reporting capital expenditures over the past six months fell five points to 52 percent. The proportion of owners planning capital expenditures over the next three to six months slipped a point to 22 percent, with 7 percent of owners saying they consider now a good time to expand.

The proportion of owners planning to increase inventories fell two points to a net 0 percent.

A net 8 percent of owners expect sales volume to increase, down four points, as 22 percent of owners cite poor sales as their top business problem.

Reports of positive earnings trends fell four points to a net negative 23 percent.

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Posted by on Apr 10 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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