Twenty-eight percent of small business owners say poor sales is still their top business problem.
business optimism gained 0.8 points in September, according to the National
Federation of Independent Business' latest index, ending a six-month decline.
However, the NFIB's chief economist cautioned that in spite of this uptick,
there is little among the 10 index components that can be considered
"positive." Reports of owners expecting real sales to improve were
higher than the previous month, but were still negative. Similarly, owners
expecting better business conditions in six months increased modestly, but this
reading also remained negative.
percent of small business owners reported that their top business problem is
still poor sales. In fact, poor sales has been the top business problem for
small business owners for the past three years, according to NFIB research. The
net percentage of owners expecting better business conditions in six months was
a negative 22 percent, up 4 points from August, but 32 percentage points lower
than January. Not seasonally adjusted, 38 percent expect deterioration and only
9 percent expect improvement.
increase in consumer spending would be the best imaginable stimulus right now,
not gimmicky Washington policies," said NFIB Chief Economist Bill
Dunkelberg. "Promising temporary tax cuts financed by permanent income tax
increases will not help many small business owners who pay taxes based on
personal-not corporate-tax rates. The key to economic recovery is restoring the
confidence of consumers; only then will small businesses begin to see the sales
they need to expand. If consumers fear the path we are on, then 'less is more'
policies that reduce the size of government will increase confidence."
net percentage of all owners (seasonally adjusted) reporting higher nominal
sales over the past three months lost 1 percentage point, falling to a net
negative 10 percent, with more firms reporting sales trending down than those
who report sales trending up. While still negative, the NFIB noted this is one
of the best readings in over 40 months. Unadjusted, 25 percent of all owners
reported higher sales (down 2 points) while 29 percent reported lower sales (up
the future for small business sales also remains weak. The net percentage of
owners expecting higher real sales gained 6 points from August to a net
negative 6 percent of all owners (seasonally adjusted), but still 19 points
below January's reading. Over the next three months, 22 percent of owners (not
seasonally adjusted) expect improvement (up 1 point) and 36 percent expect declines
(up 2 points). The NFIB said based on those numbers, it would appear that
owners have lost confidence in the economy and perhaps even in the government's
ability to assist in the recovery.
September, the employment picture also remained bleak. Fourteen percent
(seasonally adjusted) reported unfilled job openings, down 1 point from August.
Over the next three months, 11 percent said they plan to increase employment
(unchanged), and 12 percent plan to reduce their workforce (unchanged),
yielding a seasonally adjusted 4 percent of owners planning to create new jobs,
also down 1 point from August.
to credit continues plagues few of those surveyed; only 4 percent reported
financing as their top business problem. Ninety-two percent reported that all
their credit needs have been met or that they are not interested in borrowing,
while only 8 percent reported that not all of their credit needs have been
satisfied. Fifty-one percent of those surveyed said they do not want a loan. A
net 10 percent reported loans "harder to get" compared with their
last attempt (asked of regular borrowers only), down 3 points. "The weak
recovery provides little incentive to borrow to support expansion or buy new
equipment, even if interest rates are low," the report noted.