As we have reported in the past the NFIB Small Business Optomism Index isn’t really showing to much optomism even though it is widely reported that corporate America is well on its way to recovery. Todays report showed that optomism overall for small business declined for the past month by 2.6 points to 91.9 in March from 94.5 in February. This level is still at levels as normally seen during recessions and for being two years into an economic recovery, according to the economists from the White House, the index is still far off of the mark.
Of course, the biggest issue with small businesses is that current economic enviroment isn’t giving them the confidence they need to move forward and to commit investment capital. As shown in the next chart the number of businesses that say “Poor Sales” is their biggest concern is still at historically very levels as compared to the number of businesses that say “This Is A Good Time To Expand” being at very low levels.
This “gap” is really very telling of the attitude of small businesses all accross the country and since small businesses comprise about 70% of hiring of new employees this doesn’t bode well for continued increases in employment gains.
“It looks like everyone became more pessimistic in March,” said NFIB chief economist Bill Dunkelberg. “Or, perhaps, this is a ‘new normal’ and we are unlikely to see the surges usually experienced at the start of a recovery. Times are different; government, with new taxes and more restrictions, is a larger drag on the small-business community. Uncertainty continues to cloud the future while the government is persistently tone-deaf to the needs of those who create jobs and wealth. Today’s recession-level reading is, all in all, a real disappointment.”
Point well made.