Small Business lose Optimism Among weak Holiday Sales

The sentiment of U.S. small business owners stalled in December, hurt by weak sales and worries about government policies, according to a survey releasd on Tuesday.

The National Federation of Independent Business said its small business optimism index fell for the second straight month, dropping 0.3 point to 88.0 in December.

“Continued weak sales and threatening domestic policies from Washington have left small business owners with little to be optimistic about in the coming year,” said the federation’s chief economist, William Dunkelberg, in a statement.

Small business owners are not in a hiring mood because customers are not in a spending mood, the group said. Owners continued to liquidate inventories and weak sales trends gave them little reason to order new stocks.

Plans to make capital expenditures over the next few months rose 2 percentage points to 18 percent, but was still only 2 points above the 35-year record low, the group said.

“Capital spending is on the sidelines,” said Dunkelberg. “Spending on capital projects remained at historic low levels, as did the demand for credit to finance such projects.”

Of the owners surveyed, only 7 percent characterized the current period as a good time to expand facilities, down 1 point from November.

The group said 92 percent of the owners surveyed either obtained the credit they wanted or were not interested in borrowing.

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