Discover(R) Small Business Watch(SM): Small Business Economic Confidence Tumbles to 18-Month Low
28 Gennaio 2008 - 11:13PM
Business Wire
Few small business owners started out the year with confidence in
the direction of the U.S. economy, according to the Discover Small
Business Watch. The monthly index fell nearly 6� points in January
to 86.3, the second-largest point tumble in the 18-month existence
of the poll. The index has been steadily decreasing since July,
when it was 107.3. �We have a significant increase this month in
the number of small business owners who think the overall economy
is getting worse,� said Sastry Rachakonda, director of Discover's
business credit card. �Cash flow has dipped and spending on
business development is down, which causes concern in this sector.
However, the numbers that measure owners� confidence in their own
businesses have been fairly constant. It is too early to tell
whether any of the proposed stimulus plans are affecting the mood
of the small business segment of the economy.� January Key
Findings: 74 percent of small business owners feel that economic
conditions in the U.S. are getting worse, a jump from 65 percent
who felt that way in December. 44 percent said they have
experienced cash flow issues over the last 90 days, also a slight
increase from 42 percent in December but significantly more than
the 32 percent in January 2007. 35 percent of small business owners
picked the economy by far as the most important issue in the
presidential campaign. The war in Iraq was a distant second at 14
percent; followed by government ethics and corruption, 13 percent;
immigration, 11 percent; health care, 9 percent; national security,
8 percent; Social Security, 4 percent; and some other issue, 2
percent. Six percent were not sure. 26 percent of small business
owners rate the U.S. economy as excellent or good, which is lower
than the 29 percent in December who felt the same, and the lowest
since surveying began in August 2006 Poll: Few Small Business
Owners Offer Healthcare; High Costs Hamper Growth Healthcare costs
continue to be a financial burden for small businesses, according
to this month�s poll, which found that 77 percent of small business
owners do not offer health insurance to their employees, up from 74
percent last year. Thirty-nine percent of small business owners
said that the cost of health care has a major impact on their
ability to grow, while seven out of 10 said that obtaining
affordable health insurance for themselves and their employees was
very difficult (51 percent) or somewhat difficult (18 percent).
�Healthcare costs were having a big impact on businesses when we
did this survey one year ago,� said Rachakonda. �This year�s survey
shows that the situation has only worsened. Nearly four out of 10
entrepreneurs feel that healthcare costs have a major impact on
their ability to grow.� Key Healthcare Poll Findings: 25 percent of
small business owners said they are currently uninsured, up from 18
percent who said the same last year. Only 15 percent of small
business employers offer health insurance to their employees. Of
those, 40 percent have considered discontinuing it because the cost
is too high � a number that increased from 33 percent last year.
Among those small business owners who do have healthcare coverage,
27 percent are insured by another family member�s plan, while 35
percent have purchased coverage separately. 34 percent of small
business owners said their employees go without health insurance.
�Small business owners have to be flexible and resourceful to find
health insurance for themselves and their families,� Rachakonda
said. �But for those whose spouses don�t have health benefits, or
for those who can�t afford to purchase a plan, they are simply
going without.� Small businesses that cannot find a way to provide
health insurance for their employees should expect to have a more
difficult time recruiting talent. In a survey of 4,000 consumers,
49 percent said that health benefits were very important to them
when seeking employment, while another 23 percent said coverage
somewhat important in their decision to select a new job. The views
and opinions expressed by small business owners and consumers who
participate in the Small Business Watch survey are their own and do
not necessarily reflect those of Discover Financial Services or its
affiliates. About the Small Business Watch The Discover Small
Business Watch is a monthly index measuring the relative economic
confidence of U.S. small business owners who employ less than five
employees, a segment that consists of 22 million businesses
producing more than a trillion dollars in annual receipts. The
Watch is based on a national random survey of 1,000 small business
owners. It is commissioned by the Discover Business Card, which
strives to offer the best business credit card for American small
businesses, and is conducted by Rasmussen Reports, LLC
(www.rasmussenreports.com), an independent survey research firm.
The numeric index is calculated by assigning values to responses to
a set of six consistent questions. The base value of the Watch was
established at 100.0 based on surveys conducted in August of 2006.
In addition to generating the index, the Small Business Watch
surveys small business viewpoints on key business drivers, and also
surveys 4,000 consumers to gauge purchasing behavior and attitudes
towards small businesses. For past results and small business
survey data, visit www.discovercard.com/business/watch. For
information on Discover Business Card, visit
www.discovercard.com/business. About Discover Financial Services
Discover Financial Services (NYSE: DFS) is a leading credit card
issuer and electronic payment services company with one of the most
recognized brands in U.S. financial services. The company operates
the Discover Card, America�s cash rewards pioneer. Since its
inception in 1986, the company has become one of the largest card
issuers in the United States. Its payments businesses consist of
the Discover Network, with millions of merchant and cash access
locations, and PULSE, one of the nation�s leading ATM/debit
networks. Discover also operates the Goldfish credit card business
in the United Kingdom. For more information, visit
www.discoverfinancial.com.
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