Small businesses wait for economic rebound

A recent survey by the National Federation of Independent Business (NFIB) shows small-business owners are not much more optimistic than they were during the worst of the recession, according to Small-business owners still are waiting for the economic recovery that has allowed larger companies to obtain low-interest credit and boost exports and production.

NFIB's small business optimism index fell 1.2 points to 86.8 in March, which is the lowest level since July 2009. Small-business owners' pessimism reportedly is slowing job creation and weakening economic recovery.

"The March reading is very low and headed in the wrong direction," says William Dunkelberg, NFIB's chief economist. "Something isn't sitting well with small-business owners."

The index has been below 90 for 18 consecutive months, which is the longest sub-90 period since the survey began in 1973. Small-business owners' leading concerns include weak sales, uncertainty about economic recovery and obtaining loans. Fifteen percent said credit was more difficult to obtain than the last time they sought loans.

However, after shedding jobs every month since July 2008, NFIB members reported no changes in employment in March, which shows many small businesses seem to have stopped laying off workers. Still, few small companies are prepared to start hiring.

Small businesses account for about half of the gross domestic product. Firms with fewer than 50 employees create about one-third of new jobs.

Date : 4/16/2010