In spite of a disappointing jobs report, small business owners are feeling more optimistic about the future. In its monthly Small Business Optimism Survey, the National Federation of Independent Business announced on Tuesday that its optimism index rose 1.7 points to 92.9 in August.
August saw modest improvements in employment indicators and increases in capital outlay. But twenty-two percent business owners surveyed by the organization said they felt this is a bad time to expand their operations; largely because of political uncertainty. In its statement, the NIFB said, “Looking past the election and year end, owners became a bit more optimistic about improvements in real sales volumes and business conditions.”
Overall, business spending increased and job creation plans doubled last month. There was also a slight increase in the number of business owners who said they were having trouble filling their current job openings.
After five consecutive months of declines, the number of business owners who said they anticipate an increase in inflation-adjusted sales rose three points, to 18%.
Twenty-three percent of survey participants cited taxes as their single largest business problem, up from 18 percent a year earlier. Twenty-one percent said government regulations and red tape were their biggest challenge, and twenty percent of survey participants cited weak sales as their biggest business problem.
In the 2012 edition of the organization’s quadrennial “Small Business Problems & Priorities” study, the NFIB cited the cost of health insurance as the #1 problem facing most small businesses. Of the businesses surveyed in that study, 52.3 percent characterized the problem as “critical”, while only six percent said it was “not a problem.”
Seven percent of survey respondents said tight credit markets remain a problem. But the report also stated, “Credit is not a problem for most owners and the report suggests that many ‘qualified’ applicants are sitting on the sidelines waiting for economic conditions to improve before borrowing.”
The National Federation of Independent Business has been collecting data on small business economic trends since 1974, and has been conducting its monthly Small Business Optimism Surveys since 1986. Data is compiled from NFIB members and the surveys are released on the second Tuesday of each month. The August report was based on responses from 736 randomly selected NFIB member businesses.
Lucia Mutikani. “Small business confidence rises in August” Reuters.com 09/11/2012
“Small Business Problems & Priorities” – 2012 Edition” NFIB.com