Small Business Optimism Index

The National Federation of Independent Businesses (NFIB) just published its September report on small business economic trends, based on its August survey of its members. From an overall perspective their Index of Small Business Optimism fell 1.3 points to 96.3 (1986=100), but the report concludes that small business owners "are not seriously affected by all the media talk about credit crunches and recession."

Below its historical average of 100.2 for 17 of the past 18 months (NFIB has conducted its member sample monthly surveys since 1986), and below 100 all year, the Index is reflecting the overall economic growth climate. Here is how some of NFIB's findings and statistics shake out:

• Small businesses are looking hard to hire people, but their success rate is dropping. Twenty-five percent of respondents reported unfilled job openings, up two points from July; the year's average is 22%. Data indicates that the unemployment rate will stay in the 4.5% range. Thirteen percent said that availability of qualified labor was their #1 problem overall, same as June and July. Fifty-two percent are hiring/trying to hire new employees, with 84% said there are "few or no qualified applicants" for their positions.
• Plans for capital expenditures remains "steady" at 27%, with 12% of the respondents (down four points from July) noting that the current period is a good time to expand. A net zero percent expect business conditions to improve over the next six months. NFIB's concludes that small business owners still are not showing any "signs of panics in these numbers" and are not expecting a recession.
• Regular borrowing activity was reported by 35% of the owners, down one point from July. Based on all the data, NFIB concludes that there is "no evidence that credit standards are now rising and that business activity is being blunted by credit restrictions."

Shivonne Byrne, Innuity CMO

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