Small Business Optimism Sees Weak Increase

Date: June 14, 2016

NFIB Small Business Economic Trends Report Shows Index Up Slightly, But Owners’ Optimism Largely Flat

The NFIB’s latest Small Business Economic Trends report shows the Index of Small Business Optimism “rose two tenths of a point in May to 93.8, a negligible increase showing no real enthusiasm for making capital outlays, increasing inventories, or expanding.” Of the 10 index components, four posted gains, four saw a decline, and two remain unchanged, according to NFIB. The six-month outlook remains negative, with small business owners citing concerns about finding qualified candidates to fill positions. Further, many of the surveyed small business owners identified the nation’s political climate as one of the main reasons they “think the current period is a bad time to expand.” In addition, “earning trends among small businesses fell another point,” resulting in “a dismal reading of negative 20.”

What This Means For Small Businesses

There are a variety of factors contributing to the tough environment for America’s job creators. As NFIB President and CEO Juanita Duggan said in the monthly report, “Almost every month the administration announces another big regulation that makes it harder to run a business. Mix in the presidential election, which is a wild card, and weak sales, and it’s easy to see why small business owners are reluctant to make big bets right now.” This troubling small business environment will have negative consequences for the economy at large as well. Commenting on the weak economic results reflected in the latest Small Business Economic Trends report, and their long-term implications, NFIB Chief Economist Bill Dunkelberg said, “The bottom line is that without an empowered small business sector, the economy will grow at a mediocre pace,” noting “we should expect the same slow growth for the rest of the year.”

Additional Reading

Reuters and Dow Jones Newswires were among additional outlets covering the NFIB’s latest Small Business Economic Trends report.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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