A monthly measure of optimism among small business owners continues to retreat, but also remains at an historically high level. It’s a combination that signals slowing growth, but no signs of a recession.
“Perhaps the country will indeed talk itself into a recession, but not anytime soon,” said William Dunkelberg, chief economist of the National Federation of Independent Business. “The persistence of unfilled job openings and reports of a deficiency of job applicants indicate that there is still substantial economic optimism about the economy on Main Street.”
The NFIB reported its Small Business Optimism Index fell 1.3 points from August to September. At 101.8, the latest reading remains within the top 20 percent of all readings in the 46-year history of the index. The index is based on the results of monthly surveys of members of the small business advocacy group, most of them small business owners. For September, seven of 10 components of the index declined. The remaining three components remained unchanged.
A net 9 percent of small business owners responding to the survey upon which the September index was based expect the economy to improve, down three points from August.
A net 27 percent of owners plan capital outlays, down a point. A net 22 percent of owners said they consider now a good time to expand, down four points.
A net 17 percent of owners said they plan to increase staffing, down three points. Still, a net 35 percent of owners reported hard-to-fill job openings, unchanged from August. At the same time, 23 percent of owners cited finding qualified workers as their single most important business problem, ahead of taxes, regulations and the cost of labor.
Expectations for sales were less upbeat with a net 16 percent of owners anticipating higher sales, down a point.
A net 2 percent of owners reported plans to increase inventories, unchanged. But at a negative 6 percent, more owners reported current inventories as too high than too low.
At a net negative 3 percent, more owners reported lower earnings than higher earnings.