Small Business Optimism Index slips, but still near high

William Dunkelberg

William Dunkelberg

Juanita Duggan

Juanita Duggan

An index tracking optimism among small business owners has slipped, but remains near its highest level.

The National Federation of Indendent Business reported that its Small Business Optimism Index fell six-tenths of a point in February. But at 105.3, the index remains above 105 for a third straight month.

“Although optimism remains high, growth is still a problem because of restrictive government policies,” said Bill Dunkelberg, chief economist for the NFIB.

Juanita Duggan, president and chief executive officer of the small business advocacy group, said its remains to be seen if a surge in small business optimism that followed the presidential election will continue.

“The sustainability of this surge and whether it will lead to actual economic growth dpeends on Washington’s ability to deliver on the agenda that small business voted for in November,” Duggan said. “If the health care and tax policy discussions continue without action, optimism will fade.”

The NFIB bases the index on the results of monthly surveys of members, most of them small business owners. For February, six of 10 components of the index declined, three advanced and one remained unchanged.

The proportion of small business owners responding to the survey upon which the latest index was based who expect the economy to improve fell a point to 47 percent.

A net 26 percent of owners reported plans to increase capital outlays over the next three months, down a point. A net 22 percent of owners said they consider now a good time to expand, down three points.

A net 15 percent of owners reported plans to increase staffing, down three points. A net 32 percent of owners reported hard-to-fill job openings, up a point.

The share of owners reporting plans to increase inventories rose a point to a net 3 percent. The portion of those who said existing inventories are too low rose three points to a net negative 2 percent.

A net 26 percent of owners said they expect higher sales, down three points. The share of owners reporting higher earnings fell a point. At a net negative 13 percent, more owners reporting lower earnings than higher earnings.

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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