Small business optimism rises into 2012

Small business owner optimism increased in December as concerns about business conditions for the next six months subside and expectations for sales gains in the coming months increased.

The National Federation of Independent Business reported that optimism in December among owners of small businesses rose 1.8 points, the fourth consecutive monthly gain, suggesting the rising trend will continue in early 2012.

The modest gain settled the December reading at 93.8. The NFIB optimism index rose 1.8 points in November as well.

The optimism is on track to resemble early 2011 when the index reading rose in the first few months only to fall in March and April.

Many independent business leaders surveyed by Newtek Business Services (NEWT) said they are upbeat about 2012, according to its latest small business sentiment survey.

“Make no mistake: the economic winter is still here,” NFIB Chief Economist Bill Dunkelberg said. “Similar gains in the early part of 2011 quickly faded, and the index is still well below where it should be at this point in the recovery. The economy appears to be slowly recovering, resolving imbalances in debt, housing and the like.”

Dunkelberg said it is unlikely that growth in 2012 will significantly outpace 2011 even with a solid fourth quarter gross domestic product growth. “There is still a lot of work to be done,” he added.

While the index gained 5.7 points over the last four months with several indicators posting notable gains, the total reading is still in recession territory. The index remains 6 points below the pre-recession average and more than 10 points below the same point in the recovery from the 2001 recession.