A monthly measure of optimism among small business owners has edged up, but remains at a recessionary level that reflects record-level uncertainty.
The National Federation of Independent Business reported that its Small Business Optimism Index rose three-tenths of a point in October. But at 93.1, the latest reading remains well below a pre-recession average of 100.
“While four of 10 survey components rose, the index still remains in solidly pessimistic — and recessionary — territory,” said William Dunkelberg, chief economist of the NFIB.
The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group. The October survey was based on 2,029 usable responses.
Dunkelberg said the latest survey results continue to reflect uncertainty. “The election is over and Washington looks much like it did on Nov. 5,” he said. “The fear of stalemate among the small business community is palpable as the looming fiscal cliff and the threat of higher costs and more taxes are very real possibilities come January. Until then, not knowing the direction of the economy will always have a dampening impact on spending and hiring.”
The proportion of small business owners responding to the surveys upon which the October index was based who said they’re uncertain whether business conditions will be better or worse six months from now climbed to a record-high 23 percent. That proportion is eight points higher than the previous record recorded during the Carter administration.
The proportion of owners who expect the economy to improve remained unchanged at 2 percent. The share of those who said they consider now a good time to expand held steady at 7 percent.
The proportion of owners who plan to increase staffing remained unchanged at 4 percent. Meanwhile, 16 percent of owners reported hard-to-fill job openings, down a point.
The share of owners planning capital outlays over the next three to six months rose a point to 22 percent. The proportion of owners planning to increase inventories held steady at a net negative 1 percent.
The share of owners who expect sales volume to increase in coming months rose two points to 3 percent. At the same time, though, 22 percent of owners cited weak sales as their most pressing business problem, ahead of taxes and government regulation.
Report of positive earnings trends rose a point, but remained at net negative 26 percent.