Small-business owners can’t anticipate the direction of the economy, don’t know whether it’s a good time to invest, and aren’t sure whether to hire new workers, according to the latest National Federation of Independent Businesses (NFIB) Uncertainty Index published by President and CEO Juanita Duggan.
The Uncertainty Index derives from the NFIB Small Business Economic Trends Report, a monthly survey of NFIB members the organization has conducted for 42 years. Within the survey is a series of questions that ask small-business owners about the future, such as: whether now is a good time to expand, whether they expect the economy to improve, and whether they plan to hire. Under normal circumstances, small-business owners can anticipate near-term conditions and decisions. These aren’t normal circumstances, according to the report.
The volatile presidential election and the controversial nature of the two major candidates are driving the NFIB Uncertainty Index off the charts. The reading for October set an all-time high, smashing the record set in the previous month. Small-business owners cannot anticipate future government policies, such as tax rates, healthcare costs and regulatory complexity. Small businesses are paralyzed, the report concluded.
All of that uncertainty is a drag on the economy. It creates indecision, according to Duggan. Small-business owners who cannot reasonably anticipate government policies or economic conditions are unwilling to deploy capital, hire new employees, borrow money, or make any long-term financial decisions. The result is economic inertia, a near-shutdown of the kind of business activity that produces growth, new jobs and wider prosperity.
This tumultuous campaign might have been good for TV ratings and political consultants, but it’s been very hard on small-business owners, and its effects are rippling through the economy, the report said.