Small Business Optimism Ticks Up in August

Despite negative job reports, the National Federation of Independent Business' (NFIB's) Small Business Optimism Index gained 1.7 points in August, topping out at 92.9.

Positive expectations included improvements in employment indicators and overall business conditions in the fourth quarter, as well as an increase in companies making plans for capital outlays. However, responses still indicated that few employers consider this to be a good time to expand, and political uncertainty reached a new high as small employers continue to act cautiously when it comes to growing their companies.

Weak sales were also a concern in August, as trends confirmed that consumer spending remains depressed and slowed noticeably in the middle of the year. The net percent of all owners, seasonally adjusted, reporting higher nominal sales over the past three months lost four points, falling to negative 13% after a seven point decline in June. Twenty percent of all respondents still cited weak sales as their top business problem. Historically, this is a high figure, but still pales in comparison to the record of 33% set in December 2010.

Expectations in credit availability were largely unchanged, as 7% of business owners reported that all their credit needs were not met, which is the same as it was in July. An additional 31% reported all credit needs met, and 53% noted explicitly that they didn't want a loan. Financing was the top business problem for only 3% of those surveyed, compared to 23% who cited taxes and 21% who cited unreasonable regulations and red tape.

- Jacob Barron, CICP, NACM staff writer

For more information on the NFIB's latest optimism report, check out this story in this week's eNews.

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