Many economists believe that small businesses are the heart of the economy. Responsible for millions of jobs, this multi-faceted sector has taken a beating in the years since the financial crisis and subsequent Great Recession. While some market observers suggest that conditions are improving for many small businesses, a new report has thrown a bucket of ice water on any warm feelings about the growth trajectories, hiring prospects and overall sentiment of these companies.
According to the National Federation of Independent Businesses (NFIB), a trade group comprised of thousands of American small- and medium-sized businesses, the next year may be rough for the industry. Month-to-month changes in a number of optimism metrics, including inventory sizes and expansion opportunities, were down for March. Specific issues cited by owners include healthcare costs and rising taxes, both of which are exacerbated by the relative uncertainty surrounding these problems.
"After another false start, small business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce – the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy," the NFIB's chief economist, Bill Dunkelberg, said a statement. "Virtually no owners think the current period is a good time to expand, because they simply don't know what the future holds. So why invest?"
Most troubling is the revelation that, of those who participated, 0 percent of respondents said they plan on hiring. You aren't misreading this number – according to the NFIB report, none of the small business owners that answered the survey do not want to hire a person in the current economic climate.
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