Frankfort, KY - Optimism among Kentucky's small business owners may have improved slightly, but it is still weighed down by negative owner sentiment that outweighs a positive outlook, according to the National Federation of Independent Business.
Small-Business Optimism Index
NFIB's gained 1.3 points, nudging the Index up to 90.2.
This is below the year-to-date average of 91.1, only slightly better than the average since January 2009 of 89.1.
State-specific data isn't available, but Tom Underwood, NFIB's Kentucky director, said small businesses across the commonwealth face the same challenges as those in other states.
"Small-business owners face an enormous amount of uncertainty, especially when it comes to issues such as health care and burdensome regulations, and business is still sluggish," Underwood said. "Until things change and small-business owners feel good about the future, they're not going to grow. They're not going to open new stores, they're not going to invest in new equipment, and they're sure not going to create jobs."
"Consumer sentiment remains at very low levels and is reflected in the 26 percent of small business owners who cite 'poor sales' as their biggest problem," said NFIB Chief Economist Bill Dunkelberg. "There is no exuberance in spending, as consumers 'make do' rather than spend their increased savings in upgrades or new purchases.
It's that extra spending that would provide small business owners a reason to hire and order more inventory, the best stimulus we could have.
But confidence is the key and right now there isn't much.
"As for help from Washington, the Federal Reserve is "out of bullets" and Congress is completely ineffective.
Fiscal policy is in disarray and all that is proposed is higher spending and more regulations and higher taxes to support it.
Not the type of incentives that help stimulate economic growth."
October's survey shows that optimism improved a "smidge," but mostly because the outlook for business conditions and real sales growth became less negative.
However, these two Index components are still solidly negative and at recession levels. The labor market indicators remained basically flat meaning job creation will be well short of that needed just to keep up with population growth, much less reduce the unemployment rate. Capital expenditures remain depressed and there is little interest in investing in inventory.
And few firms have any interest in expanding leaving loan demand weak with about 2/3 of all owners having no interest in a loan as borrowing activity is at a 38-year low level.
Some other highlights of October's Optimism Index include: