After a February rebound, prospects for small business headed south again in March,
according to Small Business Economic Trends, a monthly survey of small-business
owners from the National Federation Independent Business Education Foundation.
The Small Business Optimism Index fell 0.6 points 97.8.
Leading components in the decline were drops in capital spending plans and hard-to-fill job openings. “The February surge in capital spending plans was a bit of an aberration and spending plans returned to their pattern for the past year, falling to the average for the past 12 months,” said William Dunkelberg, NFIB chief economist. “On the employment in front, the balance of firms reporting hard-to-fill job openings fell to the lowest reading since January. This signals a solid increase in the unemployment rate over the next few months.”
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Taxes won the balloting for the most important problem facing small business today with 25 percent of the vote, posting a large margin over the availability of qualified labor with 17 percent. Moving into third place, poor sales with 15 percent, followed by regulation and red tape with 10 percent. Inflation is the all-time winner, once attracting 42 percent of the votes as the number one problem in the early 1970s.
The survey found:
- Hiring plans fell, and fewer firms reported hard-to-fill job openings.
- The number of firms reporting that they increased labor compensation fell from February’s record level.
- More firms are raising prices this month.
- After a jump last month, capital-spending plans fell to the average for the past 12 months.
