October NFIB Small Business Economic Trends survey results show small business owners feel more optimistic now than one year ago, but only slightly.
Small Business Optimism Up Slightly In October, But Optimism Still Way Below Pre-Recession Averages
The NFIB Small Business Economic Trends Data survey seeks to measure, among other things, the overall optimism of small business owners in the U.S. The NFIB uses the data collected from surveys it conducts on a monthly basis to quantify the level of optimism small business owners are feeling. This is referred to as the Optimism Index. According to the NFIB’s November 2012 “Economic Trends” report which details the results for October 2012, “in the 40 months since the ‘recovery’ started in July 2009, the Index has been higher only eight times. And, it has never exceeded 95. The pre-recession average for the Index is 100.” With an Optimism Index score of 93.1, the October 2012 results show that optimism is up for the third straight month, since a 12 month low in July 2012 (91.2), but that it is still nowhere near the pre-recession averages of 100. In fact, October of 2007 was the last time the Optimism Index had a score higher than 95 – five years ago.
Past 12 Months have Seen its Ups and Downs for Small Business Optimism
In November 2011, the NFIB Small Business Economic Trends Data Optimism Index had a score of 92.0 which was a notable 1.8 point one month increase over October 2011. Moreover, November 2011 was the fourth straight month that the index had risen. That trend continued in December 2011 with an increase to 93.8, and then into 2012 – January and February 2012 saw consecutive increases (93.9 and 94.3, respectively), before a dip in March (92.5), only to rebound in April (94.5) and May (94.4). But, as we noted here, June 2012 saw the Optimism Index drop 3 points to 91.4. Another slight drop in July 2012 to 91.2 preceded a bump up in August and September (92.9 and 92.8, respectively), and again in October (93.1). Thus, as we close in on the end of 2012, when it comes to small business optimism, though 2012 has experienced some ups and downs, small business owners are reporting optimism levels at the highest level for the month of October in five years, since 2007 (the last time it was over 95 at 96.2). Let’s hope that this is the start of a new five year upward trend in optimism. The graph to the left shows the up and down trend from the past 12 months.