With less than a month to go before the elections, the National Federation of Independent Business (NFIB) said small business owners remain pessimistic, particularly in their plans for any near-term hiring.
In a separate report, the International Monetary Fund (IMF) confirmed the global economy has deteriorated the past few months. IMF said any failures to adequately address the looming U.S. “fiscal cliff” of higher taxes coupled with spending cuts; and the euro area crisis could make growth prospects far worse.
IMF predicted the U.S. economy will expand 1.5 percent in the second half of 2012, rising to 2.75 percent growth later in 2013. Weak household balance sheets and confidence, relatively tight financial conditions, and continued fiscal consolidation stand in the way of stronger growth, IMF stated.
NFIB polled nearly 700 small business owners nationally in September. Sales and profit trends were negative, and overall businesses spent less on capital investments for equipment and other major purchases.
The survey suggested small businesses created fewer jobs in September than the previous few months, and did not indicate any near-term gains. Business owners reported their top problems include poor sales, taxes, regulation, and red tape.
“Small-business owners are reporting that the political climate is a reason not to expand ”“ second only to the economy,” said NFIB chief economist William Dunkelberg, in a written statement. “Owners are in maintenance mode; spending only where necessary and not hiring, expanding or ordering more inventories until the future becomes more certain.”
