A national survey of small-business owners was little changed in September as weak hiring plans were balanced by respondents who believe this is a good time to expand a business, the National Federation of Independent Business said Tuesday.
The federation's Small Business Optimism index slid 0.1 points to 92.8. While up from the year-ago report of 90.2, it has slipped since peaking at 94.5 in April.
Owners created fewer jobs in September than in the two previous months. Ten percent said they plan to boost employment at their firm, which was down three percentage points, while 11 percent plan jobs reductions, a 2-point increase.
The only region showing any job growth was in west north central states, where energy production is robust.
The business owners who view the current period as a “good time to expand” gained three percentage points, and the number of owners expecting business conditions to improve in six months gained four points.
While the survey doesn't offer state-specific data, Jerrod Shouse, state director of NFIB/Oklahoma, said small businesses here and across the nation are reluctant to hire or expand until after the November election.
The survey is in line with other small-business readings that show owners are cautious. The payroll service company ADP said last week that small businesses slowed their pace of hiring during September. There have been mixed readings on how much owners are willing to borrow, but the conflicting signals do point to small companies being very careful about spending for hiring or expansion.
One reason the federation's survey showed that more owners expect business to improve: The presidential election will be decided and Congress is likely to have taken action on tax bills. That would remove some of the uncertainty that has contributed to owners' pessimism the past few months.
“Small-business owners are telling us they're more concerned about the election than they are the economy right now,” Shouse said. “They don't want to spend any money unless it's absolutely necessary. They aren't hiring, expanding or ordering more inventories until the future becomes more certain.”
NFIB Chief Economist William Dunkelberg said those concerns are echoed in the national survey.
“The election is just weeks away and essentially a horse-race, and its outcomes would have vastly divergent policy implications,” he said.
The federation questioned nearly 700 of its members as part of its survey.
The Associated Press