Small business optimism declines in May

6/15/2011

Small company owners' confidence levels continued to waver for the third straight month, with the National Federation of Independent Businesses reporting a slight 0.3 drop in May.

While the decrease in confidence is minuscule, the NFIB points to a disheartening trend of declining optimism over the past quarter. The organization chalks the dwindling confidence levels up to sluggish consumer spending, which has yet to reach pre-recession habits as of yet.

"Washington is throwing misdirected policies at the problem, offering tax breaks for hiring and equipment investment, but acting surprised when they don't bear any fruit. The failure to understand why small-business owners are not hiring or investing has resulted in a set of policies that have not been very effective, and Main Street is suffering," explains NFIB economist Bill Dunkelberg, referring to the Obama administration's Small Business Lending Program and other incentives.

The sluggish American economy is encouraging some entrepreneurs to find new markets abroad that are more viable. The U.S. Small Business Administration even recently launched a new tool designed to help entrepreneurs devise and execute an exporting program.