Small business optimism swings back up

A monthly measure of optimism among small business owners continues to fluctuate with a two-point gain in March nearly nearly erasing a loss the month before.

At 93.4, the latest reading for the Small Business Optimism Index has yet to breach a ceiling of 95 that’s persisted in the aftermath of the recession.

“Overall,  the March gain more or less reversed the February decline.

While the index still can’t seem to get above 95, we can be encouraged that the economy is at least crawling forward and not heading in reverse,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business.

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group. For March, six of 10 components of the index advanced, including those tracking the outlook for sales, inventories and earnings.

The share of small business owners responding to the survey upon which the March index was based who expect higher sales volume jumped nine points to a net 12 percent. While that reading  remains weak by historical standards, it’s one of the highest yet for a tepid recovery.

The portion of owners who plan to increase inventories rose six points to a net 1 percent. The portion of owners who said current inventories were too low rose four points to a net 0 percent.

Reports of positive earnings trends increased three points, but remained at a net negative 24 percent.

The share of owners who expect the economy to improve over the next six months edged up a point, but at a net negative 18 percent reflected more pessimistic than optimistic responses.

A net 24 percent of owners reported plans to increase capital outlays, down a point. Meanwhile, 8 percent of owners characterized now as a good time to expand, up two points.

The proportion of owners who plan to increase staffing fell two points to a net 5 percent. At the same time, though, 22 percent of owners reported hard-to-fill job openings, unchanged from February.