US small business owners slightly more confident in July

13 August 2013 18:26  [Source: ICIS news]

WASHINGTON (ICIS)--Owners of small businesses are slightly more optimistic about the US economy, a key report said on Tuesday, but confidence among the bulk of the nation’s business operators remains below levels experienced before the 2008-2009 recession.

In the monthly survey for its “Small Business Optimism Index”, the National Federation of Independent Business (NFIB) said that the measure rose by just over a half-point, or 0.6%, to a July reading of 94.1.

However, said NFIB, “this month’s report continues the historically weak trend of owner confidence”.

Because “uncertainty about the future remains endemic among [small business] job creators, only 9% of survey respondents think that now is a good time to expand their businesses”, the NFIB said.

NFIB chief economist Bill Dunkelberg noted that at 94.1, the small business optimism index “is well below the average reading of 100 in the 35 years prior” to the 2008-2009 recession.

The July index reading also is a half-point lower than it was in December 2007 when the 2008-2009 recession officially began, he said.

“Unfortunately, nothing is being done to allay the most pressing concerns identified by job creators - dealing with rising health insurance costs, regulations, tax complexity, energy costs and general economic uncertainty,” Dunkelberg said.

“Energy policy is more confused than ever and the volume of new regulations is mounting,” he said, adding: “Should I even mention the mounting problems with Obamacare?”

Obamacare is the colloquial name for President Barack Obama’s signature health care plan, formally known as the Patient Protection and Affordable Care Act (PPACA). 

Although enacted three years ago and scheduled to take full effect beginning in October this year and through 2014, the PPACA has experienced multiple false starts and the White House has postponed or suspended some of its key provisions.

Dunkelberg said that while small businesses are not sinking, they are struggling to stay afloat.

According to the NFIB survey, only 6% of small business owners expect the US economy to improve, a decline of two points since the June index.

The well-being and confidence levels of the US small business sector are important because those entities - typically firms with 500 or fewer employees - account for 64% of the new jobs generated in the economy.

The NFIB represents some 350,000 US small businesses.

The dour NFIB outlook followed a report earlier on Tuesday, showing that US consumer spending essentially has stalled.

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


By: Joe Kamalick
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