Thursday, May 20, 2010

Small business owners remain pessimistic

The National Federation of Independent Businesses’ ( monthly Small Business Economic Trends Report for April shows that optimism rose 3.8 percent to 90.6 . However, despite gains in nine of the ten index components, NFIB says that this is not enough to indicate that a “solid” recovery is underway.

NFIB reported that capital spending and plans to make outlays are at historic low levels. “Owners,” the report said, “ are very satisfied with current inventory stocks but do not plan to add aggressively, apparently because they are not very optimistic about the course of future sales and business conditions. The percent of owners reporting “weak sales” as their top problem did drop five points, but 29 percent still see this as their major challenge.”

Ninety-one percent of the owners said they got all the credit they wanted (or did not want any), only four percent said credit was their top business problem. Regular borrowers did report credit “hard or harder” to get, but that should be no surprise. So with capital spending,inventory investment and hiring plans at record lows, there is little credit demand.”

More firms still plan to reduce employment than to add new workers and a historically low 11 percent report job openings. “Uncertainty is the enemy and Washington is a major source of uncertainty for business owners,” the report said.

For a detailed copy of the report, go to

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