US small business confidence rises in Feb but still at low level

12 March 2013 21:15  [Source: ICIS news]

WASHINGTON (ICIS)--Confidence levels among US small business owners rose marginally in February, but they remain troubled by multiple uncertainties in federal policies and are unlikely to do much hiring soon, a key survey said on Tuesday.

In its monthly survey, the National Federation of Independent Business (NFIB) said that its index of small business optimism rose by 1.9 points in February to 90.8 from January’s reading of 88.9.

While that gain marks an improvement, the business confidence index at 90.8 is still at recession levels and below general trends seen in 2012, the federation said.

“The direction of February’s change is positive but not indicative of a surge in confidence among small business owners,” said NFIB chief economist Bill Dunkelberg.

“While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed,” Dunkelberg said.

“Far more firms report sales down quarter over quarter than up,” he said.

“Three-quarters of small business owners think that business conditions will be the same or worse in six months,” he said, adding: “Until owners’ forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy.”

The health of and prospects for small businesses are important because small firms – judged to be those with 500 or fewer employees – traditionally generate most new jobs in the US economy.

Much of the uncertainty among small business owners is laid at the feet of the federal government, Dunkelberg said.

“Washington is manufacturing once crisis after another – the debt ceiling, the fiscal cliff and the sequester,” he said.

“Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship,” he added.

The NFIB represents some 350,000 US small businesses.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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