Dr Jeff Cornwall

Once again entrepreneurs seem to be getting a bit grumpy about the economy according to the latest poll just released by the NFIB.
Capital spending activity by small firms remained lethargic. The frequency of reported capital outlays over the past six months was flat at 60 percent of all firms. Forty-three percent reported spending on new equipment, 23 percent acquired vehicles, and 13 percent improved or expanded their facilities. Seven percent acquired new buildings or land for expansion and 13 percent spent money for new fixtures and furniture.
Just 29 percent of owners plan to make capital expenditures over the next few months — down four points from March, reflecting pessimism among of owners about the prospects for economic growth.
Twelve percent of the owners expressed the view that the current period is a good time to expand facilities, unchanged from March and a rather weak showing. A net-negative 8 percent expect business conditions to improve over the next six months, down a point from March but typical for the later stages of an expansion. A net 14 percent expect higher real sales, unchanged from March and eight points below January.
Other signs of their pessimism can be seen in inventories, which are down in this survey, and a general avoidance of taking on any new debt.
What makes matters worse is that the pesky demon known as inflation just won’t go away either. This is what has given me the most heartburn about our economy over the past year.
Also, the SBA Office of Advocacy released the updated Quarterly Indicators: The Economy and Small Business today, which indicated that overall economic growth slowed in the first quarter of 2007.