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Small Business Optimism Inches Up In October

By Ideas Lab Staff November 13, 2012

The National Federation of Independent Business also finds however, that uncertainty about future business conditions is at an all-time high.

The survey occurred right before the presidential election, and continues the theme of anxiety small business owners expressed the previous month, over uncertainty for the political future.

A record high number of small business owners expressed uncertainty, the NFIB reported Tuesday, 23 percent.

This, the NFIB reported, far exceeded the previous record of 15 percent, which occurred during the Carter administration. The Federation’s indicators for the labor market were also down, and there is little optimism about future economic growth.

“While four of ten survey components rose, the Index still remains in solidly pessimistic – and recessionary territory,” NFIB Chief Economist William Dunkelberg is quoted as saying.

There are several contributing factors, he argues, including the impending fiscal cliff and the possibility of higher business costs and taxes, should the government fail to reach an agreement.

There was some good news: the frequency of reported capital outlays is up, as is the percentage of owners planning outlays within the next six months.

Credit: NFIB

Among the highlights: a weaker job creation month although better than September, small business owners continue to shy away from accessing more credit, they still report weak sales, and as Dunkelberg writes, much of this is unlikely to be resolved in November.

“Let’s see what the New Year and the new Congress brings, as it is likely that current Congress will simply “kick the can” at least until January,” Dunkelberg writes. “One thing for sure, the economic pressure to do something will be large indeed. The November survey will reveal a combination of the effects of the election and hurricane Sandy. Regional differences in the performance measures should be large. Stay tuned.”

Credit: NFIB

The full report for the NFIB’s Optimism Index for October.