Small-Business Owner Optimism Slides: NFIB
Job creation in the small-business sector was perhaps the only bright spot in the March report.Small-business optimism ended its slow climb, declining 1.3 points and landing at 89.5 in the March index of the National Federation of Independent Businesses (NFIB), after three months of sustained growth, suggesting small-business owners are unable to maintain their positive feelings about growth and the U.S. economy. Of the 10 index components, two increased, two were unchanged and six declined. Among the greatest declines were labor market indicators, inventory investment plans and sales expectations. In the 44 months of economic expansion since the beginning of the recovery in July 2009, the index has averaged 90.7, putting the March reading below the mean for this period. Job creation in the small-business sector was perhaps the only bright spot in the March report, as it was the fourth consecutive month of positive job growth. Owners reported increasing employment an average of 0.19 workers per firm in the month of March—the best reading NFIB has recorded in a year. For the 47 percent of owners who hired or tried to hire in the last three months, 36 percent (77 percent of those trying to hire or hiring) reported few or no qualified applicants for open positions. However, only 4 percent of owners surveyed characterized the current period as a good time to expand facilities, and the net percent of owners expecting better business conditions in six months was negative 28 percent, unchanged from February but 7 points better than December, the report found.
"After another false start, small-business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce—the fact that they are not growing, not hiring, not borrowing and not expanding like they should be is evidence enough that uncertainty is slowing the economy," NFIB chief economist Bill Dunkelberg said in a statement.