New NFIB Report: Businesses in a 'Holding Pattern' - Modern Distribution Management

New NFIB Report: Businesses in a ‘Holding Pattern’

Uncertainty is having an 'adverse impact' on optimism levels, economist says.
jenel-white

Optimism continues to fall among independent business owners, according to the latest Small Business Economic Trends report from the National Federation of Independent Business. The Optimism Index gave up another 0.2 points in July, falling to 91.2 – the same level seen during the recession.

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Why the decline? According to the NFIB, much of it can be attributed to uncertainty. In the commentary to the report, NFIB Chief Economist William C. Dunkelberg writes: "Uncertainty is a core concept in our business theories and models and there is considerable empirical support for the adverse impact of uncertainty on decision making."

Reinforcing this, most of the indicators within the report were relatively flat. "If it weren’t for population growth, Gross Domestic Product growth would be about zero," the commentary in the report reads.

Many business executives report being in a holding pattern until after the election, with the hope that some clarity will come out the results. Which means "we can expect very sluggish growth for the balance of the year," Dunkelberg says.

How are distributors viewing the current state of the economy? Read about the results from the latest MDM-Baird Distribution Survey.

View the August 2012 Small Business Economic Trends report at nfib.com.

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