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Tuesday, October 12, 2010

NFIB: Small Businesses slightly less pessimistic, Hiring plans weaken

by Calculated Risk on 10/12/2010 08:03:00 AM

From NFIB: Small Business Confidence inches up

The Index of Small Business Optimism gained 0.2 points in September, rising to 89.0. The increase is certainly not a significant move, but at least it did not fall. Still, the Index remains in recession territory. The downturn may be officially over, but small business owners have for the most part seen no evidence of it.
On employment:
Eleven (11) percent (seasonally adjusted) reported unfilled job openings, unchanged from August and historically very weak. Over the next three months, eight percent plan to increase employment (unchanged), and 16 percent plan to reduce their workforce (up three points), yielding a seasonally adjusted net negative three percent of owners planning to create new jobs, down four points from August, The decline in hiring plans is an unexpected reversal in job creation prospects. Hiring plans continue to underperform the recoveries following previous recessions.
On capital spending:
The environment for capital spending is not good. ... A net negative three percent expect business conditions to improve over the next six months, a five point improvement from August, but still more owners expect the economy to weaken than strengthen.
Note: Small businesses have a larger percentage of real estate and retail related companies than the overall economy.

And the key problem: Poor sales.