The job market remains somewhat stagnant as the economy makes slow but steady gains for the most part. However, a lot of uncertainty about the future and other issues hampered small business hiring, as well as owners’ optimism overall.
The average amount of small business employees per company dipped somewhat in September as many problems plagued the independent company job market, according to the latest data from the National Federation of Independent Business. More than two in five companies – accounting for 80 percent of those looking to actually hire workers last month – said that they had difficulty finding any qualified applicants for positions they have open. Interestingly, though, only 11 percent of companies said they actually reduced their employment totals in September, making it the month with the third-lowest number of businesses doing so since October 2007. Further, 20 percent of owners said that they had job openings they couldn’t find anyone to fill, up from 19 percent in August. Meanwhile, overall positive feelings about the future among owners took a bit of a hit.
The Small Business Optimism Index slipped to a level of 93.9, down from 94.1 in August, thanks to a large decline in the overall amount of plans for an improving economy, the report said. Interestingly, though, this poll was conducted even before the federal government’s shutdown went into effect, and that could serve to further dampen owners’ outlook as the impasse stretches on.
“The change in this month’s Index was little more than ‘statistical noise,’ but the drop in outlook for future economic conditions is evidence that many owners are keeping an eye on Washington,” said NFIB chief economist Bill Dunkelberg. “Prospects for politicians and policymakers ‘getting it right’ are low, and job creators are rolling their eyes and shaking their heads thinking, ‘This is certainly not the way to run the largest enterprise in the world.’ Between botched healthcare implementation and one manufactured crisis after another, consumers and small business owners are likely to remain pessimistic, accepting the notion that growth is going to be sub-par and that their government is likely to continue in dysfunctional mode for months to come.”
Major concerns remain largely unchanged
The three factors that have weighed most heavily on small business owners’ minds in the past year or more have been, in no particular order, taxes, poor sales, and government requirements or red tape, the report said. That trend continued into September, although there was some fluctuation in which of these issues were most pressing. September saw government requirements take over the top spot from taxes with 22 percent of owners citing it as their biggest concern, compared to 21 percent for the latter. In August, taxes were viewed as the primary point of concern by 23 percent of owners. Meanwhile, 18 percent said they thought poor sales were their biggest problem, down from 20 percent just a month earlier.
Today, 35 percent of owners say that now is not a good time for expansion because of economic conditions, the report said. Another 16 percent say the same about the way the current political climate is affecting their chances for growth.
Owners who are worried about their companies’ bottom lines in the final months before the end of the year may want to consider the ways in which they might be able to shore up their prospects, including by finding more affordable small business insurance. Cutting costs for liability insurance and other types of coverage can help them save thousands of dollars or more over the course of the year, which may put them in a better position financially going forward.