Small Business Confidence at Four-Month Low

Washington, DC, Dec. 8, 2009--Confidence among small businesses declined in November to the lowest level in four months, depressed by falling profits and slower sales, according to the National Federation of Independent Business.

The group's optimism index fell to 88.3 from 89.1 in October, the Washington-based group said Tuesday. Measures of employment, inventories and sales were negative.

"Owners can't find good reason to be optimistic about the future of the economy or their personal future," said William Dunkelberg, chief economist at the NFIB, said in a press release.

"The proximate cause is very weak consumer spending, better than a year ago, but that was pretty bad."

The report signals that small companies, which accounted for six out of every 10 jobs created over the past 15 years, will be slow to recover from the worst economic slump since the 1930s.

The figures showed negative responses exceeded positive ones in six of the index's 10 components. Earnings trends and expectations of credit availability had the lowest readings.

The group's profits gauge fell to a net minus 43 percent from minus 40 percent in October. The share of executives expecting easier credit conditions in the coming months improved to a net minus 15 percent from minus 16 percent a month earlier.

Thirty-three percent of respondents said weak sales were their primary business concern, the same as last month.

A net 8 percent of respondents said it was a good time to expand. The share of executives expecting better business conditions six months from now dropped last month to 3 percent from 11 percent in October.

A measure of capital spending plans fell to 16 percent, matching a 35-year low, from 17 percent in October.