A monthly measure of confidence among small business owners has slipped further as weaker readings for inventories and job openings more than offset expectations for improving economic conditions.
The National Federation of Independent Business reported that its Small Business Optimism Index fell three-tenths of a point to 94.1 in September. The latest reading remains below the historical average of 98.
Bill Dunkelberg, chief economist of the NFIB, said small business owners remain unlikely to add inventories or hire employees unless something changes in Washington, D.C. “It is quite clear that the top issues for small business owners will not be addressed this year,” Dunkelberg said. “The presidential election is so divisive that it offers little promise of a bipartisan effort to deal with any of these important issues.”
Juanita Duggan, president and chief executive officer of the NFIB, said the latest index reading improved from “awful” to “bad.”
“The bottom line is that small business owners are deeply uncertain about the future, and that is affecting their decisions,” she said.
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, the 10 conponents of the index were evenly split between higher and lower readings.
The portion of small business owners responding to the survey upon which the September index was based who expect the economy to improve surged 12 points. At a net negative 0 percent, equal portions of owners anticipated improving and worsening conditions.
A net 27 percent of owners reported plans for capital outlays over the next three months, down a point. A net 7 percent of owners said they consider now a good time to expand, up a point.
The share of owners planning to increase inventories fell eight points. At a net negative 7 percent, more owners plan shrinking than expanding inventories. The portion of owners who said they consider current inventories too low also fell eight points to a net negative 7 percent.
A net 10 percent of owners reported plans to increase staffing, up a point. A net 24 percent of owners reported hard-to-fill job openings, down six points.
The share of owners who said they expect higher sales climbed five points to a net 4 percent. The portion of owners reporting higher earnings rose three points to a net negative 20 percent.
Asked about their most pressing business problems, owners cited taxes, government regulations and difficulty finding qualified workers.