by Bill McBride on 8/10/2010 08:10:00 AM
Tuesday, August 10, 2010
From the National Federation of Independent Business (NFIB): Small Business Economic Trends
Click on graph for larger image in new window.
NFIB reported its optimism index fell 0.9 point to 88.1 in July. (Graph from NFIB)
Here are the details:
The Index of Small Business Optimism lost 0.9 points in July following a sharp decline in June. The persistence of Index readings below 90 is unprecedented in survey history. ...Note: A large percentage of small businesses are in real estate related fields and that will keep optimism down.
Ten (10) percent (seasonally adjusted) reported unfilled job openings, up one point from June but historically very weak. Over the next three months, nine percent plan to increase employment (down one point), and 10 percent plan to reduce their workforce (up two points) ...
The frequency of reported capital outlays over the past six months fell one point to 45 percent of all firms, one point above the 35 year record low reached most recently in December 2009. The percent of owners planning to make capital expenditures over the next few months fell one point to 18 percent, two points above the 35 year record low.
[C]redit availability does not appear to be the cause of slow growth as many allege. Four percent of the owners reported “finance” as their top business problem, down two points. Pre-1983, as many as 37 percent cited financing and interest rates as their top problem. What businesses need are customers, giving them a reason to hire and make capital expenditures and borrow to support those activities.
Once again the key problem is lack of demand.
Posted by Bill McBride on 8/10/2010 08:10:00 AM