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Small-Business Optimism Falls for Third Consecutive Month
Why so down? One in four small businesses are worried about weak consumer spending, citing it as their top business problem.
Posted 6/ 14 11 at 1:00 PM | News, Sales, Management
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The National Federation of Independent Business's Index of Small Business Optimism decreased by 0.3 points to 90.9 in May, marking the third monthly decrease in a row. Weak consumer spending was pinpointed as the main cause for the drop in optimism among the 733 randomly selected NFIB members surveyed, with one in four small businesses citing weak sales as their top business problem.Another growing concern among small businesses is inflation -- one in 10 cited it as their most serious business problem. Thirty-one percent said they were raising average selling prices, double the percentage of owners who are cutting prices. While prices increased, sales decreased, with 33 percent of small-business owners reporting lower sales, compared to 23 percent of owners reporting higher sales.
Only 3 percent cited financing as a top problem. However, the NFIB reports that capital spending is at an all-time low, with 50 percent of small businesses having made capital expenditures over the past six months and only 20 percent planning capital outlays in the next three to six months.
Small businesses are also pulling back on their plans to hire. Thirteen percent of those surveyed plan to hire in the next three months, down 3 points, while 8 percent plan to reduce their workforce, up 2 points.
Only 5 percent of the owners consider this a good time to expand. Of those who say it's a bad time to expand, 71 percent cite the weak economy as the reason.
The NFIB report said the May index indicates that "optimism is moving in the wrong direction," and calls it a "recession-level reading for an economy fighting its way through a recovery."
"Corporate profits may be at a record high, but businesses on Main Street are still scraping by," NFIB chief economist Bill Dunkelberg said in a statement.
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Comments (Page 1 of 1)
Businesses are reshaping constantly to meet economic challenges. Run lean if you're going to stay open snd make a profit. Business has learned to cut the fat and to cut the tax burden so those jobs that were cut away will not be returning. Entrepreneurs are working harder for sure and longer but keeping the money from their efforts rather than give jobs. No help from government either, mind you! No tax incentives to spur job creation or capital investment. Our current, stagnant economic atmosphere stems from a lack of vision from our elected officials and a lack of desire to work hand-in-hand with business partners to bring economic prosperity to all. Our officials want to be seen as generous, socially progressive idols who give away everything someone else worked for to anyone who didn't earn it...........as long as they can vote! Hence, business is going to remain tight with its bucks rather than do business so as to make the government appear magnamimous and fulfill its social mission to the masses.
We were given NO bailout. Gas prices take a huge chunk out of our salary. We had to scrape up what money we could, and do most of everything by ourselves to stay in business, when many of our friends' businesses failed. Chase bank didn't give us the SBA loan, but an independent SBA company did! (Superior Financial Group)
Our government didn't help -in fact it kept printing money so that the value of our dollar declined. That in turn made the gold and silver markets so high we lost sales in those metals.... so we began to buy people's gold and silver as well. These customers were very happy, and we continued in business.
We built up a great reputation on the internet for our customer service- that really helped the most. You have to keep thinking and evolving according to the economy. "Make lemonade." If the economy picks up, we could hire more people, but until then we can't. ~Rothstein Jewelers of Beverly Hills
Give me a break. Of course, it's the government's fault. Possibly, Obama, maybe? You guys make me sick.
I guess oil getting out of control wasn't just Bush either, as everyone tried to use as an excuse for high oil .... Obama let that run out of control, along with unemployment, inflation, and everything else.