Small Business Confidence at 28-Year Low

Washington, DC, April 9, 2008--Confidence among U.S. small business owners nationwide fell in March to a 28-year low, according to the Small Business Economic Trends report by the National Federation of Independent Business.

The group’s Index of Small Business Optimism fell 3.3 points in March to a seasonally adjusted 89.6 points (1986 = 100). The reading – the lowest since the second quarter of 1980, when the index fell to 80.1, followed scores of 92.9 in February, 91.8 in January and 94.6 in December.

“Recession fears are spreading and the economy is showing definite signs of slowing, even on Main Street,” the NFIB said. “For the small business sector, the decline started in September, more precisely Sept. 19,” when “the official warning of recession possibilities coupled with the Federal Reserve’s actions produced a pull-back in small business (and likely consumer) spending.”

Five percent of respondents said now is a good time to expand, and 19 percent reported current job openings. Only 3 percent of said they plan to expand their staff, however, down from 11 percent in February.

Twenty-five percent were planning capital spending, down from 26 percent the month before.

The net share expecting their own sales to improve fell 3 percentage points to negative 3 percent, while those expecting the economy to improve fell 14 percentage points to negative 23 percent.

“The weak economy does not seem to be helping on the inflation front,” the NFIB said. “The number of owners citing inflation as their No. 1 business problem is at its highest level since 1982.”