Small-Business Optimism Down

Small businesses expect the economy to weaken in 2001, though they haven’t yet changed their hiring or spending plans, reports the National Federation of Independent Business, a Washington-based advocacy group.

The shortage of qualified workers remains the biggest problem facing small businesses, said the NFIB. After that, small businesses are concerned about taxes, regulation and poor sales. In December, 35% of small firms reported lower profits while 20% said earnings rose.

More firms increased employment than reduced it, but the average decrease of 3.8 employees exceeded the increase of 1.9 workers, the NFIB said. The association said its index of small-business optimism fell in December to 96.7, its lowest level since 1993.

“The small-business economy is slowing, but not at an alarming rate,” NFIB chief economist William C. Dunkelberg said in a statement.