Small-Business Optimism Hits New Four-Year High

Posted on Mar 19, 2012

Optimism amongst small U.S. businesses rose to its highest level in more than four years in February, data released Tuesday showed, yet business owners remain concerned about future prospects.

  The National Federation of Independent Business‘s small-business optimism index rose 0.4 point to 94.3 from 93.9 in January. The February figure was its sixth consecutive monthly increase and its strongest level since December 2007.

  Characterizing the report as “a mixed bag, but mostly headed in the right direction,” the NFIB noted improvement in key areas of business activity. Still, the organization stated the headline index remains mired at levels it considers recessionary. While the report noted easier access to credit and growth in capital spending, respondents were also moderately more pessimistic about the outlook.

  According to the report, six of the index’s 10 subcomponents lost ground during February.

  The subindex of expected business conditions in the next six months fell 3 percentage points to -6% last month, even as earnings trends showed improvement, rising five points to -19%. Meanwhile, the expected higher real sales subindex increased 2 points to 12%.

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