January NFIB Small Business Optimism (or Pessimism)

Small business sentiment never really picked up from its 2009 lows and is now heading back down.

Small business sentiment never really picked up from its 2009 lows and is now heading back down.

NFIB January Small Business Optimism: +0.9.  Despite the small increase to 88.9 last month, confidence among small business owners remains near the lowest levels in this report’s 40-year history.   And while expectations for business conditions did gain 5 points to -30%, this still marks the 4th lowest reading for this gauge.  Rising taxes, higher health insurance costs and increasing regulations are killing confidence.  The frequency of capital spending rose 3 points to 55%, a level considered ‘maintenance mode.’  This level is only slightly better than those in the great depression, and combined with a bearish outlook, cap ex will continue to muddle through 2013.

Inflation and employment shine, as 43% of owners are hiring or trying to hire.  More owners reported net hiring than reductions and a lack for qualified applicants for open positions was also noted.  Similarly inflation remained in check, with a net 2% of sellers raising their average prices.  Unfortunately inflation remained controlled for all the wrong reasons: overcapacity and weak demand.  Coupled with recently weak consumer confidence reports, this NFIB report paints a bleak picture for sustainable growth in retail sales and capital spending.

2 thoughts on “January NFIB Small Business Optimism (or Pessimism)

  1. This reading improved dramatically in February. Broad-based weakness particularly focused on inventory building and increasing capital expenditures.

  2. This reading improved dramatically in February. Broad-based improvements particularly focused on inventory building and increasing capital expenditures.

Leave a Reply

Your email address will not be published.