Small Business Optimism Tanks, Owners Lose 'Hope'
Small business owners grew more pessimistic in November after the presidential election and super storm Sandy.
That's the finding of a survey by the National Federation of Independent Business. The lobbying group said Tuesday that its small-business optimism index dropped 5.6 points last month to 87.5.
NFIB Chief Economist William Dunkelberg said the biggest drag on the index was owners' expectation that business conditions will be worse six months from now. The number of owners expecting better times ahead fell 37 points.
Nearly half the owners surveyed are pessimistic. (Read More: Amid 'Fiscal Cliff' Stalemate, Main Street Deteriorates)
Dunkelberg said readings in the states hit by Sandy were more pessimistic than in the rest of the country. A greater number of owners in those states said they planned to cut their payrolls.
'Loss of Hope'
While Sandy was a drag on entrepreneurs last month, the major overhang was the "fiscal cliff" and concerns that business conditions may actually get worse — not better — six months to a year from now.
"It looked to me like a loss of hope," Dunkelberg told CNBC.com. The index reading of 87.5 is the 10th lowest in the survey's 37-year history.
There was some hope on Main Street prior to the presidential campaign. But from the point of view of small-business owners, not much has changed since the November election. "The hope for change was lost after the election. Everything is the same," Dunkelberg said. "That's the real concern."
And looking ahead to 2013, Main Street is worried about more than a debt deal and higher taxes.
"Between the looming 'fiscal cliff,' the promise of higher health care costs and the endless onslaught of new regulations, owners have found themselves in a state of pessimism," Dunkelberg said earlier in a statement. "We are forced to ask: is this the new normal?"