In its most recent report, the National Federation of Independent Business reported that small-business owner confidence remained relatively pessimistic in December. Although the overall survey results were up very slightly from November, November’s results were the second-lowest since March 2010.
This report from the NFIB was based on 648 randomly sampled small-business owners. To be eligible to participate in the monthly survey, small businesses must be members of the NFIB.
Results from December’s survey indicated 70 percent of respondents deemed the current environment a poor time to expand their businesses. Among the top reasons for the pessimism was the high level of political uncertainty. Tax policy uncertainty and a difficult regulatory environment were also noted concerns.
One measure of future growth of business is the demand for loans or credit. A more optimistic business owner is much more likely to borrow funds to expand a business. December’s NFIB survey indicated 52 percent of those surveyed did not want a loan. About 13 percent of survey respondents did not answer this question and are assumed to not need a loan at this point. When these additional 13 percent are aggregated with the 52 percent, a total of about 65 percent of small business owners indicated no need for loans to grow their businesses.
Without an expectation of an expanding business, owners are not likely to add employees. For the month of December, this group of business owners reported essentially no growth in employment — 76 percent reported no net change in employment at their firms for the month surveyed. Looking forward, only a net 1 percent of these business owners reported an intention to increase employment in the coming months.
On the sales side of these businesses, 20 percent said they expected improving sales over the next three months. Offsetting these expected gains, 40 percent expect declining sales over the same time frame.
Smaller businesses are frequently viewed as the growth engines for the U.S. economy and related employment. Given these most recent survey results, U.S. economic growth in the near term can reasonably be expected to be tepid — at best.
Kirby Brown is the CEO of Beneficial Financial Group in Salt Lake City.
- Utah's largest oil producer lays off 80...
- Failed resort embittered friends, Marc Jenson...
- Profiting as a Super Bowl host city...
- 5 reasons your most talented employees will...
- McDonald's CEO steps down as sales decline
- Fed sees strengthening economy but stays...
- Lawmakers looking to pump up gas tax this...
- Balancing act: Organizations slowly move...
- Lawmakers looking to pump up gas tax... 62
- Business community supports tax... 22
- Utah's largest oil producer lays off 80... 8
- McDonald's CEO steps down as sales decline 7
- After setting iPhone record, what does... 4
- Greek radical left wins election,... 3
- US consumer confidence jumps to 7... 3
- Knocking doors: What to know before... 3