Small business owners are more pessimistic than at almost any time in modern history following last month’s election, according to the National Federation of Independent Business:
The most significant factor impacting the decline in optimism is the expectation that future business conditions will be worse than current ones. The net percent of owners expecting better business conditions in six months fell 37 points to a net negative 35 percent. In October, the percent of owners who said they were uncertain as to whether business conditions would be better or worse in six months hit a record low of 23 percent. Many of those who were uncertain about the economy in October became decidedly negative in November; 49 percent of the owners now expect business conditions to be worse in six months, while 11 percent still express uncertainty about the future.
In the history of the monthly Index, only seven readings were lower, all but one in the last few months of 2008 and early 2009, the depths of the last recession. Prior to 1986 (when the survey was conducted on a quarterly basis), there were just two readings lower, 1975Q1 and 1980Q2.
This chart shows the NFIB’s small business optimism index from 1986 to the present:
The NFIB’s chief economist, Bill Dunkelberg, comments:
Out of 377 surveys since the first in 1973, the current reading of the Index of Small Business Optimism is the tenth lowest on record. The decline in the Index from already recession level readings in October was one of the largest on record. Something bad happened, and it wasn’t Sandy based on the NFIB survey data for November, it was the election.
Unlike the low-information voters I wrote about earlier today, small business owners understand how terrible the Obama administration is for our economy. How depressing it must have been for small businessmen and women to see the man who told them “you didn’t build that” re-elected.