Small Biz Optimism Dives Back to Oct. 2011 Level

Gains from earlier this year have been wiped out in the June update to the small business outlook index from the National Federation of Independent Business.
The NFIB’s Index of Small Business Optimism declined 3 points in June, falling to 91.4.
The decline is significant, the group said, because it relinquishes the increases from early 20112, and is a “clear indication of slow growth.”
Only one of the 10 Index components improved in June, the one measuring expected credit conditions. Ninety-three (93) percent of all owners reported that all their credit needs were met or that they were not interested in borrowing.
However, nearly one-quarter of owners cited weak sales as their most important business problem (23 percent), followed by taxes (21 percent) and unreasonable regulations and red tape (19 percent).
The NFIB’s update is based on the responses of 740 randomly sampled small businesses in its membership, surveyed throughout the month of June 2012.
The net percent of all owners (seasonally adjusted) reporting higher nominal sales over the past three months lost 7 points, falling to negative 5 percent – after reaching a five-year high of a net 4 percent in April.
Posting the first negative reading since December, the net change in employment per firm over the past few months (seasonally adjusted) was negative 0.11.
Seasonally adjusted, 9 percent of the owners added an average of 2.6 workers per firm over the past few months, and 12 percent reduced employment by an average of 2.8 workers. The remaining 79 percent of owners made no net change in employment.

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