Small-business optimism remains flat: report

The nation’s small businesses expressed more confidence in June while signaling that the sector faces bleak prospects amid sluggish economic growth.

The National Federation of Independent Business (NFIB) said Tuesday that its latest index of small-business optimism ticked up 0.7 of a point in June to 94.5 over the January reading. 

ADVERTISEMENT

“Small business optimism did not go down, which is good, but small businesses are in maintenance mode experiencing little growth,” said NFIB chief economist Bill Dunkelberg. 

“Uncertainty is high, expectations for better business conditions are low and future business investments look weak,” Dunkelberg said. 

“Our data indicate that there will be no surge from the small business sector anytime soon and prospects for economic growth are cloudy at best.”

The NFIB said that the latest survey reflects a lack of enthusiasm by small businesses for making capital outlays, increasing inventories or expanding.

The index is still below the 42-year average of 98.

Four of the index’s 10 components posted a gain, three declined and three were unchanged.

The biggest increase was “expected business conditions” that rose a solid 4 points.

One of the lingering problems for business owners is finding qualified workers.

More than half (56 percent) reported hiring or trying to hire, which was unchanged from earlier this year, but 48 percent reported few or no qualified applicants for the positions they were trying to fill.

Overall, 29 percent of all owners reported job openings they could not fill in the current period, up 2 points, the highest reading in this expansion.

A separate report from payroll processor ADP showed that small businesses added 95,000 jobs in June, more than medium- and large-sized firms. 

Job openings and capital spending plans each increased to expansion readings, but remain historically low for a period of economic growth, the report said.

Business owners frequently cited the political climate as the reason why the current period is a bad time to expand.

“Calling the current economy an expansion is an absolute oxymoron,” said Juanita Duggan, NFIB president and CEO.

“To grow the economy, policymakers need to get serious about tax reform, over-regulation and healthcare costs."