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Tuesday, May 11, 2010

Small Business Optimism Improves in April

by Calculated Risk on 5/11/2010 08:52:00 AM

From NFIB: Small Business Optimism Index Improves in April

The National Federation of Independent Business Index of Small Business Optimism gained 3.8 points in April, rising to 90.6 and ending seven straight quarters of under 90 readings. The persistence of Index readings below 90 is unprecedented in survey history. Nine of the 10 Index components rose, particularly the outlook for general business conditions and sales, and one was unchanged. Still, job measures barely moved and capital expenditure plans were flat.

“The gains are a step in the right direction, but they are not enough to signal a solid recovery is in place,” said William Dunkelberg, NFIB chief economist. “Owners are feeling a little better about things, but not enough to turn them into concrete action.”
The outlook has improved, and sales and earnings have picked up some, but hiring is "bleak".
“What small businesses need are customers, giving them a reason to hire and make capital expenditures and borrow to support those activities,” said Dunkelberg. “Bottom line, the recovery will be sub-par in comparison to the recoveries we experienced following past severe recessions such as 1980-82."
Note: although the press release doesn't mention it, there is a heavy concentration of construction related businesses in the small business sector - and obviously that is one of the weakest areas.