NFIB Says Top Business Issue Is Lack of Customers

Washington, DC, March 9, 2010--The National Federation of Independent Business  Index of Small Business Optimism dropped 1.3 points in February.

That pushed the NFIC reading back to its December reading of 88.0, the survey’s second lowest reading ever. Last March was the worst.

“News about the economy is for the most part improving, and therefore is an unlikely source of small business uncertainty and declining optimism. The Washington, D.C. agenda, on the other hand, remains a nightmare for small business owners and continues to be a real factor in small business owners not expecting business conditions to improve,” Bill Dunkelberg, NFIB’s chief economist, said in a press release.

Workforce reductions helped push the index lower. While 10 percent of companies increased employment by an average of 5.0 workers, 19 percent reduced employment an average of 3.2 workers. The index also noted that more employers are still looking to cut jobs rather than add in the coming months.

“Net job creation will appear in the coming months, but the gains will be painfully slow with timid consumer spending, especially in the service sector,” said Dunkelberg.

The top problem for most owners was the lack of sales as no new customers means no new people are needed. In addition, capital spending was unchanged and barely ahead of December lows.

“A revival of capital spending will require a significantly improved business outlook and some support from reluctant customers,” said Dunkelberg.