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Why Small Business Owners Are Hesitant to Hire

Associated Press (05/02/12) Joyce M. Rosenberg

Small businesses were the first to hire when the economy showed signs of improvement, but the pace of hiring has slowed along with economic growth. ADP says small and medium-sized businesses added just 116,000 jobs in April, down from 181,000 the prior month. Most small firms can handle new projects at current staffing levels, and they are hesitant to take on more workers when the economic and business outlook is so uncertain. Independent Community Bankers of America chief economist Paul Merski says small businesses taking out loans to cover expansion plans would be an indication that they are ready to boost hiring, but he says companies are not taking out loans and have not tapped open lines of credit.