Survey: Small business owners’ confidence rises

Confidence among U.S. small businesses rose for the first time since April as pessimism about the economic outlook abated, a private survey showed.

The National Federation of Independent Business Optimism Index increased to 91.1 in August from 88.2, the lowest level since 1980, in July, the Washington-based group said this week. The net share projecting a rebound in economic growth jumped 21 points to 4 percent, the first positive reading in a year.

“The direction of change was nicely positive,” William Dunkelberg, the group’s chief economist, said in a statement. “But we have a long way to go.”

The report showed owners on balance remained pessimistic about the outlook for sales, profits and the availability of credit. Still, company chiefs said they planned to hire and invest in new equipment, suggesting that larger businesses are responsible for the slump in hiring this year.

A net 9 percent of executives surveyed by the NFIB said they plan to increase employment during the next three months, up from 5 percent in July. The percentage of companies saying there were current job openings dropped by two percentage points to 15 percent.

Six percent of executives in the survey said it was a good time to expand, the same as in July.

The net share of executives planning to increase capital spending rose by two points to 23 percent. Those projecting an increase in sales after adjusting for inflation rose 3 points to a net minus 6 percent.

The net figures are calculated by subtracting the percent of business owners giving a negative answer from those giving a positive response.

A net minus 30 percent said earnings improved in August, up from minus 37 percent in July. A negative reading indicates a majority remains pessimistic about the profit outlook.

Executives continue to raise prices to counter their own increases in costs. A net 26 percent reported higher average selling prices for last month.

While the figure was 6 points lower than in July, it is “still one of the highest readings since the early 1980s,” Dunkelberg said in the statement. “The inflation picture remains sour.”