Small Businesses See Few Signs of Turnaround

Washington, DC, Jan. 12, 2010--U.S. small businesses are still pessimistic about business conditions.

The National Federation of Independent Business small-business index fell in December to 88.0 from 88.3 in November, the lobbying organization said.

The index has been below 90 for two years and bottomed at 81 in March.

Few business owners owners say now is a good time to expand. Sales are weak, and more firms are cutting prices than raising them.

Also, inventories are still too high. Capital spending plans are on hold. More business are reducing jobs than are hiring. Credit conditions remain tight and the political climate is negative.

Nearly half the businesses responding were in retail and construction.

The single biggest problem, businesses say, is poor sales, followed by taxes and government regulation.

"So why hasn't owner optimism soared like it usually does at the end of a recession, especially one that cut so deeply into our economic fabric?" asked William Dunkelberg, NFIB chief economist.

"The answer is 'hope and change.' There is little hope and the change that is being delivered is far from encouraging. Washington is offering nothing but higher taxes and fines and fees and more regulation."

"Confidence in our political leadership has tanked," Dunkelberg said.