A monthly index tracking optimism among small business owners has dipped on less upbeat expectations for an improving economy.
The National Federation of Independent Business reported that its Small Business Optimism Index slipped two-tenths to 93.9 in September. The largest contributing factor to the decline was an eight-point drop in a component of the index tracking the economic outlook.
“The change in this month’s index was little more than statistical noise. But the drop in the outlook for future economic conditions is evidence that many owners are keeping an eye on Washington,” said Bill Dunkelberg, chief economist for the NFIB.
“Prospects for politicians and policymakers getting it right are low, and job creators are shaking their heads thinking, ‘This is certainly not the way to run the largest enterprise in the world,’” Dunkelberg said.
While it’s still premature to assess the effects of a federal government shutdown on the small business sector, the results of the October index will better reflect how small business owners view the situation, Dunkelberg added.
The NFIB bases the Small Business Optimism Index on the results of monthly surveys of members of the small business advocacy organization.
For September, five components of the index advanced, three retreated and two remained unchanged.
The proportion of small business owners responding to the survey upon which the September index was based who expect improving business conditions in six months fell eight points to a net negative 10 percent. That means more owners expect conditions to worsen than improve.
The share of owners planning capital outlays in the next three to six months rose a point to a net 25 percent. The proportion of owners who said now is a good time to expand climbed two points to a net 8 percent.
A net 9 percent of owners reported plans to increase staffing, down a point from August. Meanwhile, 20 percent of owners reported hard-to-fill job openings, up a point.
The proportion of owners who said they expect higher sales rose three points to a net 8 percent. However, poor sales was among the three most pressing business problems owners cited, behind regulations and taxes.
A net negative 2 percent of owners reported plans to increase inventories, unchanged from August. Meanwhile a net 0 percent of owners reported current stocks as too low, also unchanged.
The share of owners who expect higher earnings fell two points to a net negative 23 percent.