Small business owners are not optimistic about the current state of the economy, according to a new survey by the National Federation of Independent Business.
The group’s Index of Small Business Optimism fell 2.2 points to 89.3, the lowest index reading since 1980, according to NFIB Chief Economist William Dunkelberg. However, he noted that the current low readings have not been accompanied by the declines in real spending and hiring seen in past recessions.
There was a modest decline in employment in May, according to the NFIB's seasonally adjusted figures. Six percent of the small business owners surveyed by the group increased employment by an average of 4.7 workers per firm, and 16 percent reduced employment an average of 2.9 workers per firm, virtually identical to the April numbers.
Forty-three percent of those surveyed hired or tried to hire (down 5 points), and 77 percent of those trying to hire reported few or no qualified applicants for the job openings they were trying to fill. Fifteen percent, on a seasonally adjusted basis, reported unfilled job openings, down six points from April. The 34-year average is 22.
"That is an indication that the unemployment rate will rise," said Dunkelberg in a statement. "Eight percent of owners reported the availability of qualified labor was their top business problem, much lower than last September (the Fed's first economic warning and rate cut) when openings stood at 25 percent of all firms, and 17 percent reported the availability of qualified workers was their top business problem."
Over the next three months, 16 percent plan to create new jobs (down three points), and 8 percent plan workforce reductions (up two points), yielding a seasonally adjusted net 2 percent of owners planning to create new jobs - down three points from April. Not seasonally adjusted, job creation plans were positive in all industry groups.
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