Small Business Optimism Index declines

A monthly measure of optimism among small business owners has retreated on less upbeat expectations for sales, economic conditions and expansions.

The National Federation of Independent Business reported that its Small Business Optimism Index dropped 2.3 points to 103 in September. The latest reading remains high by historical standards, however.

“The temptation is to blame the decline on the hurricanes in Texas and Florida, but that is not consistent with our data. Small business owners across the country were measurably less enthusiastic last month,” said Juanita Duggan, president and chief executive officer of the NFIB.

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group, most of them small business owners.

For September, six of 10 components of the index decreased, while three components increased and one remained unchanged.

A net 15 percent of small business owners responding to the survey upon which the September index was based expect increased sales, a drop of 12 points from August. At a net negative 11 percent, more owners reported lower earnings than higher earnings, unchanged from a month ago.

A net 30 percent of owners said the expect the economy to improve, down six points from August.

A net 27 percent of owners reported plans to increase capital spending over the next three to six months, down five points. A net 17 percent of owners said they consider now a good time to expand, down 10 points.

Still, a net 19 percent of owners reported plans to increase staffing, up a point. A net 30 percent of owners reported hard-to-fill job openings, down a point.

A net 7 percent of owners reported plans to increase inventories, a gain of five points that signals expectations for a stronger fourth quarter. But at a net negative 3 percent, more owners said current inventories were too high rather than two low.