A monthly index tracking confidence among small business owners has retreated on lower readings for each of its 10 components.
The National Federation of Independent Business reported that its Small Business Optimism Index dropped 2.8 points to 95.2 in March. That’s the lowest reading since June and back below the long-term average reading of 98.1.
Bill Dunkelberg, chief economist of the NFIB, said the latest reading doesn’t signal a recession, but neither does it reflect much energy for growth. Consumer spending is down and a slowdown in energy production related to low commodity prices also has taken a toll, he said.
“Overall, the economy will keep moving forward, but more like a turtle than a hare. Bad weather was certainly depressing, and Washington politics remain focused on issues that have little bearing on the current economy,” Dunkelberg said.
The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group. For March, all 10 components declined.
The proportion of small business owners responding to the survey upon which the March index was based who expect the economy to improve over the next six months dropped seven points to a net negative 1 percent.
The share of owners who plan to make capital outlays over the next three to six months fell two points to a net 24 percent. Meanwhile, 10 percent of owners said they consider now a good time to expand, down three points.
While 10 percent of owners reported plans to increase staffing, that share was down 2 points. A net 24 percent of owners reported hard-to-fill job openings, down five points.
The share of owners who plan to increase inventories retreated three points to net 1 percent.
The proportion of owners who expect increased sales declined two points to a net 13 percent. Reports of positive earnings trends fell three points to a net negative 22 percent.