Small Business Confidence Rises Despite Poor Economic Outlook
Business Owners Optimistic, But Still Hesitant To Expand
The National Federation of Independent Business released its monthly Small Business Optimism Index on Tuesday. The index rose to 92.9 during August, up 1.7 points from a 9-month low of 91.2 July. Despite slow job growth and uncertainty about the upcoming presidential election, small business hiring and spending variables improved, and more business owners reported plans to hire new employees. Demand for small business financing remains weak, with the NFIB reporting that "record levels of owners [express] no interest in a loan to finance new projects or hiring."
The frequency of capital expenditures reported during the past 6 months also increased slightly. 41 percent of business owners who made capital expenditures reported using funds to purchase new equipment, 21 percent purchased vehicles, and 14 percent reported expenditures on new or existing facilities.
Consumer spending slowed during the summer, pushing sales figures down significantly. 20 percent of small business owners report that weak sales are their greatest problem. Spending on new inventory and business expansion is expected to remain low throughout the remainder of the year.