Small-business employment is better at the end of this year than last year, as the National Federation of Independent Business (NFIB) indicators anticipated, but not enough to restore the 2007 level hiring, and uncertainty remains throughout the sector, as it anticipates increased taxes, regulations and health-care costs.
November ushered in the holiday season, but it did not translate into enthusiasm among small-business owners, whose optimism increased, but only slightly—under a point (0.9)—for a total reading of 92.5, according to the organization’s monthly Index.
The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past 3 months compared to the prior 3 months was unchanged at a negative 8 percent.
Fifteen percent still cite weak sales as their top business problem. The net percent of owners expecting higher real sales volumes rose one point to 3 percent of all owners after falling 6 points in October (seasonally adjusted), which the report characterized as a weak showing.
"The year is not ending on a high note in the small-business sector of the economy. The ‘bifurcation’ continues with the stock market hitting record high levels, but the small-business sector is showing little growth beyond that driven by population growth," NFIB chief economist Bill Dunkelberg, said in a statement. "There is also a hint that employers are getting an inkling of what Obamacare might mean for labor costs, concern about the cost and availability of insurance bumped up 3 percentage points after a long period of no real change."
Slightly under a quarter (23 percent) of all owners reported job openings they could not fill in the current period (up 2 points), a positive signal for the unemployment rate and the highest reading since January 2008. Thirteen percent reported using temporary workers, down 2 points from October.
"Small-business owners who provide health insurance may soon find that their plans ‘unacceptable’ to Obamacare and be obliged to either pay more for the coverage or abandon it and pay the benefit in cash," Dunkelberg continued. "This will be a major source of angst and uncertainty in 2014."
Credit continues to be a non-issue for small employers with just 4 percent of the owners reporting that all their credit needs were not met, down 2 points.
About a third of owners reported all credit needs met, and 52 percent explicitly said they did not want a loan. In addition, 29 percent of all owners reported borrowing on a regular basis, up 1 point but a near-record low. The average rate paid on short maturity loans was steady at 5.4 percent, the report said.