Report: Small Business Optimism is 'Clearly Stalled'

Small business ownersOptimism has “clearly stalled” among small businesses despite U.S. economic improvements. That was the summary for the end of 2009 by the National Federation of Independent Business, which today released its Index of Small Business Optimism for December.
The index lost .3 points last month, falling to 88.0. The Index is seven points higher than its second-lowest reading reached in March 2009, and has been below 90 for 15 months.
Its lowest reading was 80.1 in 1980.
“2009 was a very difficult year for small business,” said NFIB Chief Economist William Dunkelberg.  “Continued weak sales and threatening domestic policies from Washington, have left small business owners with little to be optimistic about in the coming year.”
Overall, the index findings for 2009 amounted to mixed bag of skepticism and optimism, but more of the latter.
Ten percent of business owners increased employment in December – the highest reading of 2009 – but 22 percent reduced employment, a figure that is seasonally adjusted.
However, “there is no indication that job growth will be strong enough to dramatically reduce the unemployment rate,” Dunkelberg said.
Borrowers who access capital markets at least once a quarter, and reported difficulties in getting credit, was at the highest frequency since 1983. A net 15 percent reported loans harder to get than in their last attempt, a figure unchanged from November.
“Twenty-four months of recession have sapped the financial strength of many small firms,” said Dunkelberg. 
Thirty-three percent reported “regular borrowing” typical of post-1983, a figure unchanged from November. Eight percent of all business owners said their borrowing needs were not satisfied, down two points from November.
“The remaining 92 percent of all owners either obtained the credit they wanted or were not interested in borrowing.
Only 4 percent of the owners reported finance as their number one business problem (down one point),” the Federation said.
The NFIB is the leading small business association representing small and independent businesses. It is a nonprofit, nonpartisan organization founded in 1943.

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