This post is a guest con­tri­bu­tion by Asha Ban­ga­lore, vice pres­i­dent and econ­o­mist of The North­ern Trust Company.

The Small Busi­ness Opti­mism Index moved up to 93.8 dur­ing Decem­ber from 92 in the prior month. The improve­ment is note­wor­thy and it is the high­est since Feb­ru­ary 2011. How­ever, the level of the index is within the range seen dur­ing the reces­sion (see Chart 1).

Of the sub-indexes, the per­cent­age of respon­dents indi­cat­ing that poor sales have been prob­lem­atic declined to 23% in Decem­ber vs. 25% in the pre­vi­ous month. Fur­ther reduc­tions of this com­po­nent of the sur­vey would point to a turn­around in busi­ness conditions.

Among other high­lights of the sur­vey, only 8.0% reported credit is harder to get, one of the low­est read­ings for the year (see Chart 3). Some­what con­tra­dict­ing the Decem­ber employ­ment report is the fact that only 1.0% of respon­dents indi­cated that they increased employ­ment in the last three months. Over­all, the Decem­ber report on small busi­nesses records more pos­i­tives than negatives.

Source: Asha Ban­ga­lore, North­ern Trust – Daily Eco­nomic Com­men­tary, Jan­u­ary 10, 2011.

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