The National Federation of Independent Business Index of Small Business Optimism gained 1.6 points in May with a reading of 92.2.

 

It is the best reading since September 2008's 92.9 index that occurred just before the five-point decline in October that started the rapid deterioration in the fourth quarter of 2008. In May, seven of the 10 index components rose, but job creation and capital expenditure plans barely gained and remained at recession levels.

 

In May, firms still shed workers, with the average change in employment per firm (including those with steady employment) at negative .5 workers, worse than the prior three months.  The small business sector is not contributing to private sector employment growth.

 

Nine percent (seasonally adjusted) reported unfilled job openings, down two points and historically very weak.  Over the next three months, 7 percent plan to reduce employment (unchanged), and 14 percent plan to create new jobs (unchanged), yielding a seasonally adjusted net 1 percent of owners planning to create new jobs, two points better than the April reading and positive for the first time in 19 months.

 

The frequency of reported capital outlays over the past six months was unchanged at 46 percent of all firms, two points above the 35-year record low reached most recently in December 2009.  Of those making expenditures, 32 percent reported spending on new equipment (unchanged), 17 percent acquired vehicles (up two points), and 11 percent improved or expanded facilities (up one point). Five percent acquired new buildings or land for expansion (up one point), and 10 percent spent money for new fixtures and furniture (unchanged).  

 

Article courtesy of the Corridor Media Group.