Small Business Optimism Index slips

Juanita Duggan
Juanita Duggan

A monthly measure of optimism among small business owners has slipped in part because of difficulty in finding qualified applicants to fill job openings.

The National Federation of Independent Business reported its Small Business Optimism Index fell four-tenths of a point to 104.4 in December. That’s 4.4 points below the record high for the index posted in August.

A record 39 percent of small business owners responding to the survey upon which the latest index was based reported unfilled job openings, up five points.

“Optimism among small business owners continues to push record highs, but they need workers to generate more sales, provide services and complete projects,” said Juanita Duggan, president and chief executive officer of the NFIB. “Two of every three of these new jobs are historically created by the small business half of the economy, so it will be Main Street that will continue to drive economic growth.”

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 December, six of 10 components of the index retreated and four advanced.

The proportion of those who expect the economy to improve fell six points to a net 16 percent.

A net 25 percent of owners reported plans to increase capital outlays in coming months, down four points. A net 24 percent of owners said they consider now a good time to expand, down five points.

A net 23 percent of owners reported plans to increase staffing, up a point. The same proportion of owners cited the difficulty of finding qualified workers as their single most important business problem.

The share of owners planning to increase inventories rose six points to a net 8 percent. But at a net negative 4 percent, more owners reported existing inventories as too high rather than too low.

The proportion of those who said they expect sales to increase fell a point to a net 23 percent. At a net negative 7 percent, more owners reported lower earnings than higher earnings.