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Small-Business Confidence Rises for the First Time in Three Months

WASHINGTON — Small-business confidence in the United States rose in January for the first time in three months, according to the National Federation of Independent Business (NFIB) optimism index. The index climbed to 89.3 — the highest it’s been in 16 months — from 88 in December.
Despite the slight increase in optimism, the index is still very close to the March 2009 low of 81, which was the second-lowest on record. Approximately 30% of the companies surveyed indicated that a lack of sales remained their biggest concern, and a majority of small businesses expect profit and employment to decline.
“The good news was less bad news,” William Dunkelberg, chief economist for NFIB, said in a statement. “Optimism has clearly stalled, in spite of the improvements in the economy in the second half of 2009.”
Seven of the index’s 10 components rose in January, with an increase in sales prospects and a reduction in the number of companies planning to cut stockpiles leading the way. The number of business leaders stating that inventories were too low also increased, and more planned to increase spending on new equipment.
The index was held back by declines in the net number of companies saying it was a good time to expand and the number anticipating better business conditions in the next six months.
The NFIB report was based on 2,114 survey responses through Jan. 31.
 

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