Small business optimism index up in July: survey

WASHINGTON (Reuters) - Optimism among small businesses in the United States rose 1.6 points last month as firms said they planned to hire more workers than in June, a survey released on Tuesday showed.

The Index of Small Business Optimism rose in July to 97.6, the National Federation of Independent Business said in its monthly report.

While small business owners did some solid hiring in July, during the next three months 13 percent of those owners polled said they plan to create new jobs, an increase of one percentage point from the previous month, the group said.

Job creation plans were upbeat in all industry groups, the survey said, with the strongest seen in professional services, wholesale and manufacturing.

Taxes and the cost and availability of insurance were the leading business-related problems cited in the survey.

The hottest regions for hiring were in the East South Central and Mountain states, while the East North Central states were plagued by problems in the auto industry.

Credit markets have remained friendly to owners of small businesses as long as they needed credit to "support reasonable business activities," the group said.

NFIB said only 3 percent of the owners polled cited the cost and availability of credit as their number one business problem, far from the record 37 percent reached in 1982.

The cost of short-term loans has risen since the Federal Reserve started raising rates, but credit availability has not changed, NFIB said.

Twelve percent of the owners reported higher rates on short-term loans, unchanged from June and the lowest reading since 2004, the group said.

"Since small business loans typically re-price at five year intervals, there is a considerable lag between the time the Fed reports tighter lending standards for small business loans and owners actually reporting loans hard to get," the group said.

"Economic growth will be sub-par, but no 'R word' is in the minds of America's small businesses," said William Dunkleberg, chief economist for the group.

The results are based on 1,613 respondents to the July survey of a random sample of NFIB member firms surveyed through July 31.