A survey of small business owners' confidence in the economy reached a six month low in August as they continue to worry about slow sales.
The National Federal of Independent Business (NFIB) released their "Small-Business Optimism Index" for August showed that owner confidence dropped by 1.8 points in the month to reach a level of 88.1. The index, tracked since 1986 reached an all time low in early 2009. After climbing in early 2011, the Index has now declined for the six consecutive month.
The August report marks the first survey conducted following the debt ceiling debate and negotiation in Washington.
“The results of this month’s survey are very telling,” said NFIB Chief Economist Bill Dunkelberg. “The tumultuous debate over the nation’s debt ceiling and a dramatic 11th hour ‘rescue’ by lawmakers did nothing to improve the outlook of job-makers. In fact, hope for improvement in the economy faded even further throughout the month, proving that short-term fixes will not help. Private sector decision makers think longer term and they don’t like what they see. There is little clarity or certainty. When people are uncertain about the future or fear it, they don’t spend or invest, and they chase after protection—and protection is unlikely to come from the government.”
The percentage of business owners who expect better business conditions within six months fell by 11 percent from July to 26 percent, with only 12 percent viewing the current climate as a good time to expand facilities.
The report for August was based upon 926 randomly sampled small businesses from the NFIB's membership. It is designed to provide an economic outlook from the perspective of small business owners.