Small Business Optimism 2015

Firms with fewer than 500 employees are characterized as small businesses by the Small Business Administration.  According to the National Federation of Independent Business (NFIB), these companies are 99.5 percent of all employer firms.  The NFIB likes to survey companies that have staffs considerably smaller than 500 people in order to gauge the firms’ attitude about the economy.  According to their chief economist Bill Dunkelberg, 90 percent of all employer firms employ 20 or fewer people, and this is the cohort on which the NFIB concentrates when trying to determine the optimism of small businesses.

In the latest survey of small business optimism, the index, now at 95.4, gained 1.3 points.  Unfortunately, this does not make up for the 4.0 points it lost in June, and the tally remains below its 42-year average of 98.0 and is 5 points lower than its December 2014 reading.  Not much has changed from a year earlier as the same four troublesome issues in July 2014 are bothering those polled today.  Taxes top the list, and government red tape/regulations are a close second.  Issues three and four, quality of labor and poor sales respectively, swapped positions versus a year earlier.

Years into the current expansion and small businesses are feeling below average.  This cohort is especially worried about taxes and regulations, much more according to the polls than issues three (labor quality) and four (sales).  Atlas is troubled that the primary concerns are not economic, but originate in the beltway.  Can this change any time soon?  Fortunately for America, the 2016 campaigning process is off to an early start.  By this time next year, the direction of the Federal Government will have become much more certain, right?  We certainly hope so but aren’t holding our breath.    (by C. Cox)