Small businesses, a key driver of economic growth, are taking a dim view of the prospects for a solid recovery any time soon from the Great Recession.
Their confidence remains low, according to the National Federation of Independent Business. The NFIB’s Small Business Optimism Index fell 0.1 point last month to 94.4, essentially unchanged from April.
In the depths of the downturn, the index fell to the low 80s. It has since been crawling back toward pre-recession levels -- until stalling last month.
“This is a recession-level reading,” Bill Dunkelberg, chief economist at the NFIB, told CNBC. “They’re not putting money on the table. They’re not making any bets. There’s too much uncertainty out there.”
Only 7% of businesses surveyed said now is a good time to expand, the same percentage as the previous month. About 6% said it was a good time to hire new employees.
Overall confidence in the economy slipped earlier this month after the Labor Department released its May jobs report, which showed the unemployment rate ticking up a tenth of a percentage point to 8.2%.
Confidence in the economy fell two percentage points last week, to -20, from the previous week, according to Gallup.
U.S. economic growth has slowed this spring, weighed down by “higher energy prices in early 2012, concerns about the situation in Europe, the presidential election and worries over possible tax increases and spending cuts,” according to a report by the PNC Financial Services Group.
The NFIB report comes on the heels of data showing small business lending slowing. The Small Business Lending Index by Thompson/Reuters and PayNet showed loans at historically low levels, indicating business’ waning faith in the economy.