Tags: Small-Business | Owners | Government | Optimism

Small-Business Owners: Winter Is Not Over By a Long Shot

By    |   Tuesday, 11 March 2014 10:00 AM

The level of optimism among U.S. small-business owners ticked down in February to a reading associated with recessions and periods of stunted growth, according to the latest survey from the National Federal of Independent Business (NFIB).

The group’s chief economist, Bill Dunkelberg, blamed the 2.7 point dip to a reading of 91.4 on the state of government in the nation’s capital.

“Lacking any progress in Washington and facing continued unknowns with the healthcare law, the EPA, the minimum wage, tax reform and more, it is no surprise that the Small Business Optimism Index fell, reversing a few months of modest gain,” he said.

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“As long as uncertainty remains high, owners will remain cautious when it comes to increasing inventory. Business owners aren’t going to bet their money on a future they cannot see clearly.”

The NFIB’s February indicators showed employment at small businesses was virtually unchanged from January, although 22 percent reported job openings they were unable to fill during the month.

Only 17 percent of NFIB owners said they planned to increase employment, and 4 percent were planning reductions.

Sales, earnings and wages remained in negative territory in February. Only 25 percent of business owners surveyed said they are planning capital outlays in the next three to six months, inventories shrank slightly, and 15 percent reported lowering their average selling prices.

“As disturbing as the decline in job creation plans was, the plunge in expectations for improvements in real sales in the coming months, and for business conditions six months from now, show that we shouldn’t expect blue skies soon,” Dunkelberg said.

Reuters reported U.S. small businesses actually borrowed more money in January than they did in the year-ago month, with the Thomson Reuters/PayNet Small Business Lending Index up 4 percent.

An increase in the index is typically correlated with stronger U.S. economic growth a quarter or two in the future, as more company spending translates into higher business activity.

"It was unexciting growth but it was growth nonetheless," PayNet founder Bill Phelan said.

A February Gallup survey showed U.S. small-business owners believe that attracting more customers and business is the most important challenge they face today, with 21 percent citing that challenge.

Next in the list of concerns for that Gallup survey were challenges associated with the economy in general (11 percent), government regulation (11 percent), healthcare issues (8 percent), and hiring and employee retention concerns (8 percent).

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The level of optimism among U.S. small-business owners ticked down in February to a reading associated with recessions and periods of stunted growth, according to the latest survey from the National Federal of Independent Business (NFIB).
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2014-00-11
Tuesday, 11 March 2014 10:00 AM
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