Confidence among U.S. small businesses dropped in March for the first time in seven months as companies grew concerned about the outlook for sales and tempered plans to take on additional employees, a survey found.
The National Federation of Independent Business’s optimism index declined to 92.5 from a one-year high of 94.3 in February, the Washington-based group said today in a statement. Nine of the measure’s 10 components fell.
Company leaders may be growing concerned that rising fuel costs will again slow the economic recovery, calling into question whether hiring will pick up after payrolls climbed less than forecast last month. The world’s largest economy added 120,000 in March, the fewest in five months.
“The March survey results were bad news, ending what promised to be a steady, albeit glacial, improvement in the small business sector of the economy,” William Dunkelberg, the group’s chief economist, said in the statement. “The mood of owners just can’t shake off the uncertainties out there.”
A net zero percent of small-business owners said they planned to hire over the next three months, down four points from February, the report showed. The share of owners projecting higher sales, adjusted for inflation, dropped four points to 8 percent, and a net minus 23 percent said earnings trends were positive, also decreased four points.
The survey’s net figures are calculated by subtracting the percent of business owners giving a negative answer from those with a positive response and adjusting the results for seasonal variations.
The gauge of expectations for improved business conditions six months from now fell two points to a net minus 8 percent. A net 7 percent of businesses thought it was a good time to expand, decreasing one point from the prior month.
A measure of inventory levels was the only component to increase in March. A net 3 percent of respondents said stockpiles were too low, up 1 percent from the prior month.
Rising input costs loom as the biggest obstacle for 9 percent of the companies polled, the second-highest share since 2008.
The NFIB report was based on responses from 757 small-business owners through March 30. Small companies represent more than 99 percent of all U.S. employers, according to the U.S. Small Business Administration. A small business is defined as an independent enterprise employing as many as 500 people.