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SMB Optimism Down, Reports NFIB

Written by Ken Gaebler
Published: 12/9/2009

The NFIB's SMB Economic Trends Index reveals that entrepreneurs still feel the full impacts of the recession.

In recent news for small business owners, the National Federation of Independent Business recently released their monthly Small Business Economic Trends Index. Reportedly, SMB owners are not optimistic about the current climate.

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The index reveals that SMB owner optimism is stuck at recession levels. The optimism index dropped 0.8 points to 88.3 points - the survey's third lowest reading to date. The report's authors also point out that the Index has been below 90 for six quarters, indicating the severity of this downturn.

Decreased optimism is likely related to the results of the profits and wages index. Positive profit trends are at a net negative of 43 percentage points, with only 10 percent of SMB respondents reporting increased profits and 51 percent reporting falling profits.

"The biggest problem continues to be a shortage of customers," William Dunkelberg, chief economist for NFIB, told Herald Net. "Sales are not picking up, so survival requires continuous attention to costs," he advises.

In spite of the poor results, the NFIB report states that consumer spending - though weak - is better than a year ago. The authors suggest SMB owners decrease inventory spending.

Even if SMB owners are not optimistic, they might be wise to keep up employee morale; according to the Guardian Life Index, motivated employees are key in small businesses' ability to draw consumer spending.

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