Small business confidence index rises, but still reflects “subpar” recovery


William Dunkelberg

A monthly measure of optimism among small business owners has increased on more upbeat expectations for an improving economy and increased sales and hiring.

The National Federation of Independent Business reported that its Index of Small Business Optimism rose 2.6 points to 92.1 in April.

Still, the latest index reading and the survey results upon which it was based continue to reflect a “subpar” recovery for small businesses, said Bill Dunkelberg, chief economist for the NFIB.

“Small business confidence saw an uptick this last month, but it was a ho-hum, yawn, at-least-it-didn’t-go-down reading,” Dunkelberg said. “Nothing in the NFIB data suggests that the small business half of the economy is expanding other than by an amount driven by population growth and associated new business starts now in excess of terminations.”

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group. For April, four of 10 components of the index advanced, two retreated and four remained unchanged.

The proportion of owners responding to the survey upon which the latest index was based who expect the economy to improve jumped 13 points, but stood at a net negative 15 percent.

The share of owners who expect higher real sales climbed eight points to a net 4 percent. Still, 16 percent of owners cited weak sales as their most pressing business problem, third behind taxes and regulations.

The proportion of owners planning to increase hiring in coming months advanced six points to a net 6 percent. Meanwhile, 18 percent of owners reported hard-to-fill job openings, unchanged from last month.

The share of owners planning capital outlays dropped two points to 23 percent, while the proportion of those who said they consider now a good time to expand held steady at 4 percent. The share of owners planning to increase inventories rose five points, but stood at net zero.

Reports of positive earnings trends held steady at a net negative 23 percent.