Small business optimism took a hit in March with many owners indicating they have no plans to expand their workforce in the immediate future, according to the monthly survey released Tuesday by the National Federation of Independent Business.
After three months of increased optimism by small-business owners, nearly three-quarters of entrepreneurs indicate business conditions won't change or may get worse over the next six months, the survey said. The monthly index declined 1.3 points from February to 89.5. The index since July 2009 typically averages 90.7.
"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?" said NFIB chief economist Bill Dunkelberg in a statement. "And with the lack of any sustainable fiscal policy or a federal budget, no one's banking that Washington will be at the forefront of any meaningful change.
"Overall, it appears that there will be little growth coming from the small-business half of the economy; as the world economy slows, even big business may suffer."
Job creation was one of a few bright spots in the report, with employers reporting an average increase of 0.19 workers per firm in March -- the fourth consecutive month of positive job growth, the survey said. Small-business sales had its best reading in eight months but more firms are still reporting declines than gains.
The survey indicated that most owners are still in "maintenance mode" when it comes to major capital outlays, and just 4 percent said this is a good time to expand current facilities.
NFIB said the survey is based on the responses of 759 randomly sampled small businesses in its membership.
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