updated: 7/10/2012 12:54:49 PM
The National Federation of Independent Business' Indiana office is alarmed by a big drop in the level of optimism among small business owners. The federation's June Index of Small Business Optimism has fallen three points, following several months of slow growth. State Director Barbara Quandt says there are around 400 federal regulations currently pending, and many business owners are looking for answers before they increase hiring.
July 10, 2012
Indianapolis (July 10, 2012) – The Indiana office of the National Federation of Independent Business (NFIB) said today that a big drop in the level of optimism among small business owners is cause for alarm.
“Indiana is on the upswing because of good leadership at the state level, but if the national economy tanks it won’t matter very much,” said NFIB State Director Barbara Quandt. “From our vantage point it’s clear that Washington needs to follow Indianapolis and not the other way around.”
In a disappointing reversal of several months of slow but positive growth, June’s Index of Small Business Optimism dove three points, falling to 91.4. The decline is significant, and relinquished the gains achieved earlier this year. Only one of the ten Index components improved; labor market indicators and spending plans for capital equipment and inventories accounted for about 40 percent of the decline. Political uncertainty remains historically high and continues to be a primary cause for a reticence among small-business owners to expand.
“All in all, this month’s survey was a real economic downer,” said NFIB Chief Economist William Dunkelberg. “The economy has definitely slowed; job growth will be far short of that needed to reduce the unemployment rate unless lots of unemployed leave the labor force—no consolation. Taxes remain a top concern for the small-business community. With the Supreme Court’s endorsement of the individual mandate as a tax in its health care decision, we will have to wait for July’s survey to realize the effect it will have on small-business confidence. With over 20 new taxes contained in the law—a price-tag of $800 billion—and most of the regulations yet to be written by HHS, the implications for employee costs remain unclear. Uncertainty reigns supreme for much of Main Street.”
June’s report also showed a reversal in earnings trends, chipping in 21 percent of the decline, and expectations for business conditions and real sales gains contributed 40 percent of the Index decline.
Source: National Federation of Independent Business