NFIB Survey: Fiscal Cliff Gives Small Business the Blues
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Washington’s debate over the fiscal cliff barely moved the National Federation of Independent Business Small Business Optimism Index for December. With the 0.5 increase, the “reading was still the second lowest since March 2010” and still at a recession level.
According to the survey, 70% think it’s a bad time to expand right now, with a quarter of them blaming political uncertainty. Net job creation was slightly higher than in November, but was still near zero. Eleven percent surveyed said they added jobs, 13% cut jobs, and 76% made no net change.
The top three issues facing small business according to the survey are taxes (23%), regulations (21%) and “poor sales” (19%).
NFIB chief economist Bill Dunkelberg blamed much of the pessimistic vibe on Washington:
Congress played chicken right up to the end of the year, leaving small-business owners with no new information about the economy’s future—no sense of how much their taxes would increase or if the economy would go over the now infamous “cliff.”
The eleventh hour “deal” has brought marginal certainty about tax rates and extenders and will provide some relief to owners, but it certainly doesn’t guarantee a more positive forecast for the economy. The January survey results will be far more enlightening about how the sector views the deal—higher taxes and minimal spending cuts may not be a panacea. And let’s not forget what is looming on the horizon: a debate over the debt limit and a regulatory avalanche of historic proportions about to spill out into the country.
We’ll get more data on small business attitudes about the economy when the U.S. Chamber’s Quarterly Small Business Outlook Survey comes out on Friday.