Small firms’ economic confidence strong

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Small-Business Optimism Index
September, 2007 compared to previous month
Plan To Increase Employment 14 -1
Plan To Increase Cap. Outlays* 29 2
Plan To Increase Inventories 0 4
Expect Economy To Improve 2 2
Expect Higher Real Sales 14 1
Current Inventory Satisfaction -3 -1
Current Job Openings* 25 0
Expected Credit Conditions -10 -1
Now A Good Time To Expand* 14 2
Earnings Trends -20 2

The National Federation of Independent Business Small-Business Optimism Index rose one point last month to 97.3. The Index has been below its historical average for 17 of the past 18 months, reflecting the sub-par growth of the economy.

Small business owners felt pretty good about the economy during September and are likely to hold on to that sentiment for the rest of they year.

Nearly 60 percent of the firms polled for the National Federation of Independent’ Business’ September Small Business Optimism Index reported an increased capital spending during the past six months, and about 29 percent said they plan to make expenditures within the next few months.

Only 3 percent of the owners cited the cost and availability of credit as their top business problem, down from the record 37 percent in 1982.

However, at the same time, the percentage of owners reporting that loans are harder to get in recent months has risen to a net 9 percent, the highest reading in 14 years.

Still, 14 percent said this was a good time to expand, up two points from August.

Overall, the NFIB’s small business index for September rose one point to 97.3, but has stayed below its base year value of 100 all year, reflecting sub-par growth for the economy.