Small-business optimism flat in September

Small-business optimism was essentially unchanged in September, according to an industry index, as companies play a wait-and-see game with the election.

The National Federation of Independent Business (NFIB) said Tuesday that its small-business optimism index slid down 0.1 points last month, to 92.8. 

With just weeks until November’s election, NFIB said that owners created fewer jobs in September, and are citing the uncertain political climate as a reason not to expand. 

William Dunkelberg, NFIB’s chief economist, said in a statement that owners were waiting to see whether Democrats or Republicans would come out on top in November, given that both sides have espoused different visions over how to deal with the tax increases and spending cuts that are scheduled to go into place around the end of the year. 

“In the meantime, owners are in maintenance mode; spending only when necessary and not hiring, expanding or ordering more inventories until the future becomes more ‘certain,’ ” Dunkelberg said.  

The 92.8 figure for the index still marks an improvement from July, when the index bottomed out for the year at 91.8. The index’s highest point this year was April, when it stood at 94.5.

NFIB also noted that, in the more than quarter century it has produced the optimism index, the monthly figure has come in below 93 on 56 different occasions. More than half of those – 32 in all – have occurred since the current economic recovery started in June 2009. 

The small-business lobby also said that owners were “collectively pessimistic” about business conditions, with the percent of companies planning increased investment in the next three to six months dropping.

But the survey also found that the number of owners who believe now is a good time to expand their facilities increasing, even if that 7 percent figure remains well short of where it was five years ago. More owners, according to the survey, also expect better business conditions within the next half a year. 

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