Small-business owners’ optimism slips in July

Eroding earnings trends ate away at small-business owners’ collective outlook in July, according to an index from the National Federation of Independent Business (NFIB).

The association’s Small Business Optimism Index slumped 0.2 points to 91.2. July stands as the index’s third consecutive month of decline, although the month’s drop was smaller than a three-point decrease that took place in June.

Business owners’ optimism continues to languish at “recession levels,” the NFIB said in its monthly report on the index. Sagging earnings underpinned July’s falling optimism, as the index component measuring earnings tumbled a net 5 percentage points.

That left a seasonally adjusted net negative 27 percent of survey respondents reporting higher earnings in the last three months versus the prior three months. The negative result shows that reports of lower earnings predominated, because the NFIB calculates net percentages by subtracting pessimistic survey responses from optimistic responses.

The Small Business Optimism Index shows the results of a national survey. But New York’s business owners are also losing confidence, says NFIB New York State Director Mike Durant. A proposal introduced late in this year’s legislative session to raise the state’s minimum wage has combined with a possible New York State Thruway toll increase to hurt optimism, he says.

“In New York, I think that business owners that were NFIB members were starting to feel somewhat confident as 2011 went into 2012,” he says. “As session ended and we went into minimum-wage increase talks and toll hikes, I think they’re feeling somewhat less optimism.”

The NFIB is a nonprofit organization with members in 50 states and Washington, D.C. It randomly surveyed 1,803 of its member businesses in the month of July to develop the optimism index.

Contact Seltzer at rseltzer@cnybj.com