NFIB Small Business Optimism – February 2013

The February NFIB Small Business Optimism report was released yesterday, February 12.  The headline of the Press Release is “Small-Business Owner Confidence Barely Budges.”  The subtitle is “The New Year begins with low expectation for future growth.”

The Index of Small Business Optimism rose .9 points in January to 88.9.

Here are some excerpts from the Press Release that I find particularly notable:

Small-business owner confidence continues to drag, according to the National Federation of Independent Business (NFIB) Small Business Optimism Index. The Index gained 0.9 points, rising to 88.9, failing to regain the losses caused by last month’s “fiscal cliff” scare. Expectations for improved business conditions increased by five points, but remain overwhelmingly low—negative 30 percent—the fourth lowest reading in survey history. Actual job creation and job creation plans improved nominally, but still not enough to keep up with population growth.

“The Optimism Index barely budged in January. The only good news is that it ‘budged’ up, not down. If small businesses were publicly traded companies, the stock market would be in shambles. While corporate profits are at record levels as a share of GDP, small businesses are still struggling to turn a profit,” said NFIB chief economist Bill Dunkelberg. “With the dismal news that our economy actually contracted in the fourth quarter of 2012, it isn’t any wonder that more small firms expect their real sales volumes to fall, few have plans to invest in new inventory, and hardly any owners are expanding or hiring.

also:

Sales trends remain overwhelmingly negative for small employers, with still more owners reporting declining sales than experiencing positive sales trends.

Also, an excerpt regarding "Credit Markets" from a different document regarding the February small business economic trends:

Six percent of the owners reported that all their credit needs were not met, unchanged from December. Thirty-one (31) percent reported all credit needs met and 3% reported that financing was their top business problem. Thirty-one (31) percent of all owners reported borrowing on a regular basis, up 2 points from December and historically low. A net 7% reported loans “harder to get” compared to their last attempt (asked of regular borrowers only), 2 points lower than December. The average rate paid on short maturity loans was 5.5%, stuck at much the same level for years.

Here is a chart of the NFIB Small Business Optimism chart, as seen in Doug Short’s February 12 post titled “Small Business Sentiment:  Up Fractionally But Still One of the Lowest Readings in Survey History” :

(click on chart to enlarge image)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1519.43 as this post is written