Small Business Confidence in the Economy Erodes
It appears that worry about the economy has started to catch up to small businesses owners. One of the primary barometers of their sentiment was released Tuesday, and the results were troubling, although not completely negative.
The National Federation of Independent Business (NFIB) Small Business Optimism Index for August showed a drop of 1.6 points from the month before. At 103.1, the index showed that sentiment is still better than normal. However, there were cracks in the figures.
NFIB President and CEO Juanita D. Duggan said:
In spite of the success we continue to see on Main Street, the manic predictions of recession are having a psychological effect and creating uncertainty for small business owners throughout the country. Small business owners continue to invest, grow, and hire at historically high levels, and we see no indication of a coming recession.
Though small business owners have become more concerned about the future, the reasons are not entirely negative: “The Uncertainty Index rose four points in August, suggesting that small business owners are reluctant to make major spending commitments. In fact, the main impediment to more growth is the record level of no qualified workers.” Capital outlays and purchase of equipment stayed strong.
The number of owners who believe they can raise prices fell five points to 17%. The reasons for this were not entirely clear. The number of owners who expect to raise compensation tailed off as well.
Finally, the problems small business owners have is a bit of good news. “As seen in NFIB’s August Jobs Report, a record 27 percent of owners reported finding qualified workers is their No. 1 business problem.”