Although small business owners remain uncertain about the economy, September’s National Federation of Independent Business’s Small Business Optimism Index crept up 0.2 points month-on-month to 96.1. It remains below the 42-year average of 98, however.
“Small business optimism continues to be stagnant, which is consistent with the expected economic growth of about 2.5%,” said Bill Dunkelberg, NFIB chief economist. “The percent of owners citing the difficulty of finding qualified workers as their most important business problem increased and is now third on the list behind taxes and regulations. This is the highest reading since 2007 and suggests that employers will continue to face wage pressure in order to attract and keep good employees.”
Two percent, a record low, of owners said their borrowing needs were not met; 30% said they were; and 57%, a record high, didn’t want a loan. Of those that borrowed, 29% reported doing so on a regular basis. The average rate paid on short maturity loans dropped 60 basis points to 4.8%. The net percent of owners who expected credit conditions to ease over the coming months was minus 6%--a 1 point improvement. “Interest rates are low, but prospects for putting borrowed money profitably to work have not improved enough to induce owners to substantially step up their borrowing and spending,” the index states.
- Diana Mota, NACM associate editor