Small-business owners were less optimistic about the economy last month amid signs of another slowdown in the recovery.
The Small Business Optimism Index from the National Federation of Independent Business dropped to 89.5 in March, down 1.3 points from the previous month, the group said Tuesday.
The measure, based on a random survey of 759 business owners, had risen for three straight months. The average monthly reading has been 90.7 since the end of the Great Recession in mid-2009.
Businesses reported adding jobs in March, the fourth straight month of gains. Companies said they added an average of 0.19 workers, the highest level in a year.
But with the large automatic budget cuts that are looming in Washington adding to an uncertain economic climate, business owners surveyed by the group said they were pessimistic about spending more to hire or expand their inventories.
“After another false start, small-business confidence has sputtered and stalled again,” said Bill Dunkelberg, the trade group’s chief economist. “Virtually no owners think the current period is a good time to expand, because they simply don’t know what the future holds.”
Expectations for increased sales in the next three months dropped in March, leading to a pullback in plans to add workers, inventory or equipment, the report said.
Overall, the March index showed small businesses surveyed were not planning to hire new workers in the next three months. In February, about 4 percent of firms said they planned to hire.
Partisan gridlock in Washington over the nation’s rising debt, along with tax increases at the start of the year, have led to a slowdown in growth.
On Friday, the government reported that the economy added just 88,000 net new jobs in March, down sharply from the previous month.
Source: MCT Information Services