It looks like small businesses have something to be merry about this holiday season.
The National Federation of Small Business (NFIB) is reporting that small business optimism rose 1.5 points in November to 93.2, the highest reading since the recession began in December 2007. This is the Optimism Index’s fourth consecutive monthly increase.
“Small businesses are becoming more active, and conditions are falling into place for them to play an even larger role in the recovery next year,” said economist Ryan Sweet of Moody’s. “Some of the major issues restraining small businesses are being resolved; consumers are spending more freely, and banks are loosening lending standards.”
Over the next three months, a net four percent of small businesses plan to expand their employment, the second consecutive increase and highest level since 2008 -- good news after November’s unemployment rate inched up to 9.8 percent. Small businesses employ a large share of the workforce.
The employment improvement is consistent with other labor market indicators that show small firms are pushing harder on the accelerator, Sweet said.
But the good news should be taken with a grain of salt: the index is still at a recession-level reading. The average was about 100 before the recession started. “Overall, job creation is likely to continue but at a tepid pace,” said Bill Dunkelberg, NFIB’s chief economist.
Credit conditions for small businesses were also improving. Overall, 91 percent of small businesses reported that all their credit needs were met, or that they were not interested in borrowing. And a record 53 percent said they did not want a loan.
Visit the Biz Buzz home page.
