Across the country, many small business owners have likely observed the many false starts and stops in the national economic recovery and wondered what it meant for their small business. It seems that, among other things, the winter weather that has plagued many parts of the U.S. in the last few months might be taking a toll on expectations for future improvement among many entrepreneurs.
In all, the amount of positive sentiment among privately operated companies nationwide fell 2.7 points to a rating of just 91.4, according to the latest Small Business Optimism Index from the National Federation of Independent Business. Readings of this level in the past have typically come in when the economy is in a recession or growth has been well below historical norms.
“Uncertainty is a major cause of the Index’s dip,” said NFIB chief economist Bill Dunkelberg. “Lacking any progress in Washington and facing continued unknowns with the healthcare law, the EPA, the minimum wage, tax reform and more, it is no surprise that the Small Business Optimism Index fell, reversing a few months of modest gains. As long as uncertainty remains high, owners will remain cautious when it comes to increasing inventory. Business owners aren’t going to bet their money on a future they cannot see clearly.”
Hiring expectations take a major hit
In all, nearly one out of every five owners expected that the economy would not improve in the coming months, down from slightly more than one in 10 who felt the same way during the month of January, the report said. Moreover, the number of owners who say they have plans to increase hiring is down 5 percent during that same period. To that end, Dunkelberg further added that February actually saw more hiring than expected, but that it had little impact on the national unemployment rate, which rose slightly. Therefore, expectations of diminished job growth over the next six months likely won’t help the situation going forward.
Owners worried about their bottom lines during this time of difficulty might want to consider the ways in which they can reduce their costs overall. That could include finding more affordable small business insurance policies, such as those for consultant insurance, as cutting costs here and there might end up saving them as much as a few thousand dollars per year.