The National Federation of Independent Business' Index of Small Business Optimism declined 1.3 points to 89.5 in March, ending a slow climb and dropping below its average of 90.7 over the economic expansion of the past 44 months, the organization said today.
American small business remains in the doldrums it entered in 2007 and is "not growing, not hiring, not borrowing and not expanding enough," the advocacy group said in its monthly economic trends report for April, in which the March survey results are reported and analyzed.
Job creation was a modest bright spot, recording the best figures in a year, the NFIB said. Nevertheless, company owners "see little reason to hire," it said. More firms are reporting sales declines than gains, relatively few plan capital outlays in the near future and respondents who expect worse business conditions in six months outnumber those expecting better conditions by 28 percentage points, the NFIB said.
"At the same time, the Fortune 500 is posting record high profits," the report said. "Clearly, we have a bifurcated economy, with large firms making hay but GDP growing little."
The report criticized the Federal Reserve's policy of quantitative easing, saying it has done little for the real economy. Twenty-three percent of the March survey respondents called taxes their No. 1 problem and 21 percent cite governmental red tape; only 3 percent say it's availability of credit, a record low, the NFIB said.
The March results are based on the 759 responses to the NFIB's survey, which initially went out to 3,938 small-business owners and managers. The report did not indicate a margin of error.