September 10th, 2010 by admin
According to a recently released survey, small businesses in the United States are now more optimistic than they have been in the last 2 years. Though small business owners expressed optimism about the economic outlook, they were reluctant to expand staffs and boost capital spending.
The National Federation of Independent Business (NFIB) said 7 out of the 10 index components rose as per its survey but capital expenditure and job creation plans barely gained and were the same as those during the recession.
NFIB chief economist William Dunkelberg said the biggest concern of small business owners is weak sales and until that turns around, they will not be inclined to hire new staff or invest in new equipment.
The NFIB survey of 823 businesses through the end of May showed that more small businesses are experiencing weakening sales than are enjoying sales improvement. Widespread price cutting was also reported, it said. May was the 18th consecutive month in which more business owners reported cutting average selling prices than raising them.
“The Fed is right, the likelihood of inflation breaking out in the near term is low, but the picture is changing and could change quickly,” the NFIB report concluded.
Small businesses account for about half of gross domestic product and many analysts do not see U.S. employment picking up much until small firms begin hiring.
The survey also disclosed that more small business owners expect market conditions to improve in the coming six months.