BUSI600-D03: Forum 2 – Part 1
Chapter 19 question #8
Chapter 19- #8: The Index of Small Business Optimism declined 3 points in June 2012, falling to 91.4 and losing gains achieved earlier in the year, according to the NFIB Research Foundation report. Labor market indicators and spending plans for inventories and spending plans for inventories and capital equipment drove about 40 percent of the decline. Small-business owners’ reluctance to expand remained historically high due to political uncertainty. The report’s Optimism Index contains questions on employment, capital outlays, inventories, the economy in general, sales, credit, expansion, and earnings. What other factors affect small-business confidence and how would you integrate them into the report?
In reference to the National Federation of Independence Businesses (NFIB) report, other factors affecting small-business confidence according to a 2013 NFIB index; sited job creation within the small-business sector as the only positive detail (Eddy, 2013). There was an increase in employment among small-businesses with an average of 0.19 employees per firm. Contrarily, almost 50% of business owners who were hiring reported limited applicants meeting the qualifications for open positions were received (Eddy, 2013). The report concluded that small-business optimism became stagnant during a 1.3 point decline resulting at 89.5 in the March report (2013). This in turn revealed uncertainties within the small-business sector regarding the growth of the United States economy. The index components of the report consisted of increases, unchanged, and declines. Labor market, inventory investment plans, and sales expectations also seem to contribute to the low optimism among small business owners. This is all very relevant, considering the small business sector is responsible for producing half of the private GDP and is the highest employer of within the private sector workforce.