The latest reading from the National Federation of Independent Business is not all that encouraging as regards the future as the small business optimism index has fallen back to the levels seen in February of 2011. The latest index only dropped another tenth of a point from where it was but the last few readings have been pretty weak.  The index now stands at 94.4 and that is far below the level that represents growth and confidence. The expectations are what dragged the index down this time as most respondents indicated that current conditions are not great but tolerable.  The future is murky and caution rules on everything from potential to hire to potential to invest in capital equipment. There is nothing new about this theme but given that so few in political leadership seem to be taking it to heart it bears repeating.

BUSINESS DOES NOT LIKE UNCERTAINTY. This is the message that the CBO tried to emphasize when it released its data on the fiscal cliff. This is not the time to drag out responses for political purposes and the business community is essentially admitting that it has gone into hibernation as it tries to puzzle out what to do next. The role of small business has been discussed in detail – it is the engine of job growth and still affects consumer behavior profoundly.

There is really no growth without a healthy small business community but they are also the most vulnerable when it comes to political and economic uncertainty.

Courtesy Dr. Chris Kuehl, BIIA Ex-officio board member, Armada Corporate Intelligence