The latest survey of small business owners taken by the NFIB is out and the results show the mood of entrepreneurs has not gotten any worse.
The NFIB Index of Small Business Optimism gained 3.8 points in April, rising to 90.6 and ending seven straight quarters of under 90 readings.
Two statistics show that small business owners do not trust a recovery is really underway.
First, job measures barely moved. Eleven percent (seasonally adjusted) reported unfilled job openings, up two points but historically still very weak. Over the next three months, 7 percent plan to reduce employment (unchanged) and 14 percent plan to create new jobs (down 1 point), yielding a seasonally adjusted net-negative 1 percent of owners planning to create new jobs. This result shows little hope of a jobs recovery coming from small business owners anytime soon.
Second, capital expenditure plans were flat. The frequency of reported capital outlays over the past six months rose one point to 46 percent of all firms in April, which keeps it only two points above the 35-year record low reached most recently in December 2009.
Of those making expenditures, 32 percent reported spending on new equipment (up two points), 15 percent acquired vehicles (down one point), and 10 percent improved or expanded facilities (up two points). Four percent acquired new buildings or land for expansion (unchanged), and 10 percent spent money for new fixtures and furniture (up one point).
Plans to make capital expenditures over the next few months were unchanged at 19 percent, 3 points above the 35-year record low.
Only four percent characterized the current period as a good time to expand facilities.
In a way I see these results as good news. These entrepreneurs recognize the need to be cautious right now. This economic crisis is far from over, so prudence is a virtue that all entrepreneurs should strive for.
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