Small biz optimism tempered by regulations, group says

 

The National Federation of Independent Business released a survey Tuesday showing increased optimism among small business owners.

The NFIB’s monthly Small Business Optimism Index for April rose a modest 1.8 points to 95.2, eclipsing the 95 mark for the first time in the post-economic crisis era, according to the survey.

However, business owners’ brightened outlook remains clouded by lingering financial concerns linked to Washington’s policies, the group found.

“From the small business perspective there continues to be no progress on their top problems: cost of health insurance, uncertainty about economic conditions, energy costs, uncertainty about government actions, unreasonable regulation and red tape, and the tax code,” NFIB chief economist Bill Dunkelberg said.

April’s mark is still 5 points below the survey’s average reading in the 35-year stretch between 1973 and 2008, when the full force of the Great Recession struck. The crisis, brought on in part by risky and predatory financial practices in the private sector, triggered a marked increase in federal oversight and a wave of new regulations.

The Dodd-Frank financial reform law alone has required the development of hundreds of new rules that business groups say amount to a government overcorrection.

Still, April saw modest increases in the number of small-business owners who plan to increase employment, make capital outlays and expect the economy to improve further, the survey found.

But small companies continue to struggle in other areas, with inventory totals down for more companies and fewer owners expecting their sales to increase.

“So while the improvement is welcome, as long as small business owners continue to have negative views owners about the future, the 95 number may fade,” Dunkelberg said.

The NFIB’s Small Business Optimism Index is based on a survey of 1,699 randomly selected small businesses in the business group’s membership. The full report is available here.