Tuesday, October 8, 2013

Small Business Optimism Dipped in September

The NFIB’s Small Business Optimism Index shrank by 0.2 points in September to 93.9. September’s drop was largely due to a significant increase in future business condition pessimism. Given the subsequent government shutdown and uncertain fiscal climate, the trend should continue in October.

Financing continues to be the least cited factor holding back small business conditions, dropping to 2% of respondents citing it as the single most important problem. Government requirement and red tape took over the top spot as the most commonly cited problem, increasing to 22% of respondents, up 1% from the month prior. Taxes were the second most commonly cited problem, with 21% of respondents reporting it as their top concern.

The details of the report were mixed. Four Index components improved, four fell and two were unchanged from the previous month. Most components saw small changes, however expected business conditions in 6 months took a massive hit, losing 8 points. It’s too early to tell if the drop was a result of the looming government shutdown.

Job creation plans dropped 1 point from August, settling at 9%. However, August’s levels were the highest seen since 2007, and the drop is modest. Moreover, job reduction plans for small businesses is lower in September, as 11% reported reducing employment, the third lowest reading since October 2007.

Read the NFIB report.

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