Still Just Surviving

The NFIB Index of Small Business Optimism for January finds that optimism has clearly stalled for small business owners.
 
"Small business owners entered 2010 the same way they left 2009, depressed," said William Dunkelberg, NFIB chief economist. "The biggest problem continues to be a shortage of customers."

The highlights:

• Employment --Owners reported workforce reductions that average .52 workers per firm, basically unchanged for the past several months.
  

• Capital Spending --the frequency of reported capital outlays over the past six months rose three points to 47 percent of all firms, an improvement from December's record-low reading, but historically very weak. 
  

• Inventories and Sales --Small business owners continued to liquidate inventories and weak sales trends gave little reason to order new stocks. 
  

 

• Earnings -- In a word -- weak.  "Don't expect much spending or hiring until these trends reverse," said Dunkelberg.
  

• Credit --Regular borrowers (accessing capital markets at least once a quarter) continued to report difficulties in arranging credit at the highest frequency since 1983. 
  

The engine of any recovery -- small business -- is still in a survival mode.