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06 12 2015

Business Owners Confidence at 5 Month High

06 12 2015

Small Business Owner Confidence Reaches 5 Month High

Now is the time to take advantage of a small-business loan to grow your company and increase profits. According to the National Federation of Independent Business, the confidence level of owners has reached a five-month high, with many owners expecting a solid improvement in profits. This bodes well for the economy’s overall prospects as we move into the summer months.

The NFSB’s Small Business Optimism Index rose 1.4 points to reach 98.3, the highest reading since December’s 100.3. Overall, most of the Index’s components saw an increase, except Plans to Increase Inventory and Expected Credit Conditions, which remained the same. Meanwhile, Plans to Make Capital Outlays dropped 1 percent and Expect Real Sales Higher saw a 3 percent decrease.

Despite a bit of skepticism, NFIB Chief Economist Bill Dunkelberg​, said the survey confirmed that the economy is moving ahead and owners are doing what is necessary to keep up with growth.

“It appears that the small business sector has finally attained a normal level of activity which will hopefully keep the economy moving forward,” said Dunkelberg. “That being said, improved profit trends accounted for half the Index gain, a rather unusual but welcomed development. This was supported by positive sales trends and continued, although rising, fuel prices.”

Unusual trend

The confidence level of small-business owners is surprising to some economists. Recently, the Bureau of Economic Analysis released data showing the economy contracted by 0.7 percent in the first quarter instead of the early estimates indicating 0.2 percent growth, Forbes reported. Weak private inventory investment and larger-than-expected import figures contributed to the re-calculation. In light of this jarring news on economic growth, many economists are welcoming these indicators of increasing confidence continuing among small-business owners.

Despite the economic woes, many are still optimistic of a bounce back. Jim O’Sullivan, chief U.S. economist at High Frequency Economics doesn’t think the GDP dip is cause for great concern.

“In short, GDP looks even weaker than before, but we remain skeptical about the sudden-deterioration signal,” wrote O’Sullivan, according to the source. “The pattern is somewhat reminiscent of early 2014, when a 2.1 percent rate of decline in Q1 was followed by a +4.6 percent pace in Q2.”

The first quarter’s economic slowdown marks the third time the economy has shrunk since the financial crisis of 2009. With such uncertainty in the marketplace, small-business owners need to take advantage of the opportunities at hand, such as a small-business loan for working capital, to remain competitive, grow their company and remain profitable.

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