NEW YORK (AP) — Small business owners grew a little more optimism about their companies and the economy during May, according to a survey released Tuesday.
The National Federation of Independent Business said its Index of Small Business Optimism rose 2.3 points to 94.4, the highest reading in a year and the second-highest since the recession began in December 2007. The increase followed a 2.6-point gain in April. The advocacy group compiled the index from a survey of 715 of its members.
Improving expectations for business conditions over the next six months accounted for about 40 percent of the gain in the index, the NFIB said. Another 15 percent came from owners' expectations that their sales will rise.
NFIB Chief Economist William Dunkelberg acknowledged the improvement but cautioned against reading too much into the gain. Owners' optimism is not yet at the levels seen in periods of solid growth, he noted.
"Two good months don't make a trend, but we can't have a trend without them, so it's a start," he said.
The optimism didn't translate into plans to expand payrolls. The number of owners planning to add staffers fell 1 percentage point during May, with just 5 percent planning to hire. And the number of owners planning major capital investments in the next three to six months — for example, in equipment — was unchanged.
The number of owners expecting revenue to increase rose 4 percentage points, with 8 percent of owners forecasting gains. Dunkelberg noted the improvement, but also said the readings were weak by historical standards.
A separate survey released by the financial services company The Hartford found that owners are becoming more cautious. Eighty percent of the 1,000 owners surveyed called themselves conservative in risk-taking. That's up from 73 percent in a survey last fall, and 49 percent a year ago.
At the same time, owners say some of the biggest risks they face are declining. Fifty-two percent said slow economic growth is a risk to their companies, down from 67 percent last fall. Forty-four percent call health care costs a risk, down from 53 percent. And only 40 percent call taxes a risk to their business, down from 59 percent — not surprising after lawmakers resolved their differences over taxes as 2013 arrived.