The National
Federation of Independent Business (NFIB) informed Tuesday its Small
Business Optimism Index dropped by 0.9 point to 88.5 in March, following a 0.5-point fall in the previous month. This was the lowest reading since December 2012 (88.0) and marked
the 27th straight month the indicator stayed below the 50-year average of 98.0.
Economists had predicted
the index to increase to 90.2 in March.
According to
the report, the March drop in the headline gauge was due to declines in 6
components, driven by a measure of small business owners expecting higher real
sales volumes (-8 points) and a measure of owners expecting easier credit conditions
(-2 points). These decreases, however, were partly offset by advances in such 2
indicators, as a measure of small business owners expecting the improvement in
the economy (+3 points) and as a measure of small business owners reporting
positive profit trends (+2 points) Meanwhile, a measure of small business
owners planning to increase inventories in the coming months and a measure of
small business owners reporting job openings they could not fill in the current
period were unchanged.
Commenting on
the latest data, Bill Dunkelberg, NFIB Chief Economist, said that, small
business optimism had reached the lowest level since 2012 as owners continued
to manage numerous economic headwinds. “Inflation has once again been reported
as the top business problem on Main Street and the labour market has only eased
slightly,” he added.