A monthly index tracking optimism among small business owners has retreated on less upbeat expectations for hiring and sales.
The National Federation of Independent Business reported that its Index of Small Business Optimism fell 1.3 points to 89.5 in March. The decline ended a string of three straight months of gains.
Over 44 months of economic expansion since July 2009, the index reading has averaged 90.7, putting the latest reading below that level.
“After another false start, small business confidence has sputtered and stalled again,” said Bill Dunkelberg, chief economist of the NFIB. “For the sector that produces half the private GDP and employs half the private-sector work force, the fact that they are not growing, not hiring, not borrowing and not expanding like they should be is evidence enough that uncertainty is slowing the economy.”
The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group.
For March, six of 10 components of the index declined while two increased and two held steady.
The proportion of owners responding to the survey upon which the latest index was based who expect the economy to improve held steady — but at a net negative 28 percent. More than 75 percent of owners said they expect business conditions to remain the same or get worse over the next six months.
While job growth is expected in some sectors and some geographic areas, the share of owners planning to increase hiring in coming months fell four points to an even zero. Meanwhile, 18 percent of owners reported hard-to-fill job openings, down three points.
The proportion of those planning capital outlays held steady at 25 percent. But the share of those who said they consider now a good time to expand edged down a point to 4 percent.
A net negative 5 percent of owners plan to increase inventories, down four points.
A net negative 4 percent of owners said they expect higher sales, down five points. Meanwhile, 17 percent of owners cited weak sales as their most pressing business problem.
Reports of positive earnings trends increased three points, but remained at a net negative 23 percent.