After gains in April and May, small business confidence sputtered in June as NFIB’s monthly economic Index dropped just under a point (0.9) and landed at 93.5, a crisis of confidence among job creators.
I have written before about the inability of the White House to connect the dots between regulatory policy and job creation – especially for small business. My Politics colleague, Dale Hansen, echoed that disconnect in a recent article declaring that regulations are not such a big deal (more on that in a forthcoming post).
Dale cites the Huffington Post as a source for business research, but my organization, the National Federation of Independent Business, has access to plenty of data as well – such as the aforementioned Index which we obtain by asking live small business owners what their challenges are in expanding their businesses.
While job creation plans increased slightly in June, expectations for improved business conditions remained negative. The Index—which was 12 points higher in June than at its lowest reading during the Great Recession but 7 points below the pre-2008 average and 14 points below the peak for the expansion—has been teetering between modest increases and declines for months.
The top business problems for small-business owners in June were taxes and regulations and red tape, with 20 percent of those surveyed ranking each as their No. 1 problem. Another 18 percent of owners cited weak sales as their top problem, but only 2 percent reported that financing was a major concern.
It is true that small business is much more heavily dependent than larger businesses on household income growth and consumer confidence – and those two indicators have been flat for several years. However, until small businesses gain more confidence, the general economy will remain sluggish. As long as the current administration is blind to the impact of their tax and regulatory policies, that confidence will be elusive.
For more on the impact of federal regulations on small business visit www.sensibleregs.com