Despite recent job creation, small business owners say that they will cease hiring in the near future, according to the latest Small Business Economic Trends report released by the National Federation of Independent Business. Owners also revealed that a key challenge is finding qualified workers.
According to NFIB’s April report, based on a survey of 759 small and independent business owners, hiring peaked last month, and owners increased employment by an average of 0.19 workers per firm in March — the best reading in a year.
One area of concern is finding the right applicants for open positions. Of the 47 percent of business owners who hired or attempted to hire over the last three months, 36 percent of them reported that they had a difficult time finding qualified workers.
The NFIB survey reflects similar findings by the Society for Human Resource Management, which found that two-thirds (66 percent) of hiring firms are having difficulty finding sufficient employees for specific positions.
Small business owner optimism is also down, declining 1.3 points in March to 89.5, which is 3 points below the 2012 number and 10 points below the historical average, according to NFIB. Of those surveyed last month, 77 percent of owners said they felt economic conditions will be the same or worse in six months. Only 4 percent said they felt that the current period is a good time to expand.
“For the sector that produces half the private GDP and employs half the private sector workforce, the fact that they are not growing, not hiring, not borrowing, and not expanding like they should be, is evidence enough that uncertainty is slowing the economy,” said NFIB chief economist Bill Dunkelberg. “Overall, it appears that there will be little growth coming from the small business half of the economy; as the world economy slows, even big business may suffer.”
Dunkelberg told CNBC that the drop in optimism was surprising, considering that hiring trends were improving in recent weeks.