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On Small Business
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Posted at 11:52 AM ET, 06/12/2012

Hopes on hold: Small business optimism remains low in May

Small business owners have had a rather sour outlook on business conditions all year, and evidently, nothing that happened in May did anything to turn it around.


Small business owners are increasingly concerned about their future sales. (JOHN TERHUNE - ASSOCIATED PRESS)
The National Federation of Independent Business’s small business optimism index held nearly steady at a dismal 94.4 last month, down a tenth of a point from the reading in April and back to its recorded level from February 2011. The outlook was largely driven down by concerns over customer demand as well as an overwhelming sense of uncertainty about the larger economy.

“The calculus of spending decisions requires an estimate of future sales, tax rates, interest rates and credit availability, labor costs, health-care costs, regulatory compliance costs, all of which are very uncertain,” NFIB chief economist William Dunkelberg said in the report.

Most of that uncertainty originates in Washington, Dunkelberg said. Sixty percent of business owners reported no plans to expand their companies, and of those, one in four blamed their decision on the current political situation, which will not be resolved until at least November.

Moreover, business owners who expect the economy to continue deteriorating still outnumber those who expect conditions to improve.

The NFIB questioned 681 randomly selected members for the survey.

The lone silver lining in the report was a one point increase in the percentage of small employers planning to hire new workers. But even that bright spot was diminished by the fact that more than a third of them said they are struggling to find qualified workers for their openings.

“The lack of progress is discouraging, producing no signs that economic activity will pick up this year at all,” Dunkelberg said.

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By  |  11:52 AM ET, 06/12/2012

Tags:  small business, optimism

 
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