Small-Business Sentiment Falls for Third Month in Row: NFIB Survey

Tuesday, 14 Jun 2011 10:02 AM

 

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Small-business sentiment in the United States fell for a third straight month in May, landing squarely in recessionary territory due to consumer reticence, high unemployment, and inflation worries, according to a monthly survey released on Tuesday.

"The most apparent reason for the weak optimism is the weak recovery," the National Federation of Independent Business, a trade group, said in its May report.

Consumer spending is weak, especially for services, an area in which small business plays a major role, the NFIB said. It cited weak job market indicators and investment plans that are at recessionary levels.

Smaller firms have not experienced the same profitability as their larger siblings.

"Only the big banks and the big manufacturers are winning," the NFIB said. "Earnings trends for small business are distressingly negative and the recovery is two years old."

Almost two-thirds of business owners polled view the current period as a bad time to expand, and 71 percent of those blamed the weak economy.

Rising prices contributed to the gloom, with one in 10 businesses citing it as their most pressing business problem.

For 25 months, more owners reported cutting average selling prices than raising them, the NFIB said. In February, this changed, with a net 5 percent reporting raising average selling prices. That increased to 15 percent in May, the group said.

© 2014 Thomson/Reuters. All rights reserved.

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