Discover® Small Business WatchSM: Small Business Economic Confidence Drops Sharply after 3-Month Climb
26 Maggio 2009 - 11:05AM
Business Wire
After reaching its highest level in 14 months, the economic
confidence among small business owners fell in May as owners
reported cash flow concerns and expect to cut back on business
development spending, according to the latest Discover� Small
Business WatchSM. The monthly
index dropped more than 10 points to 78.1, down from 88.5 in
April.
The Watch also recorded significant drops in the numbers of
small business owners who think the overall economy is getting
better, and number of owners who thought economic conditions were
improving for their own businesses.
�We saw cash flow problems jump this month to their highest
level in 2� years, which is certainly not going to boost the
optimism of a small business owner, especially in this economic
climate,� said Ryan Scully, director of Discover's business credit
card. �However, for the past three months we�ve been recording our
highest confidence levels since summer of 2008, so all is not
lost.�
May Highlights:
- 49 percent of small business
owners say they have experienced temporary cash flow issues in the
past 90 days, up 10 percentage points from April. That�s the
highest percentage in that category since the Watch started in
August 2006.
- Nearly half of small business
owners, or 48 percent, see economic conditions for their businesses
getting worse, up from 40 percent in April; 24 percent see
conditions improving, down from 32 percent last month; and 23
percent say conditions are the same; 4 percent were not sure.
- 60 percent of small business
operators rate the economy as poor, up from 54 percent in April.
Only 7 percent rate the economy as excellent or good, and 32
percent called it fair.
- 57 percent believe the economy
is getting worse, up from 51 percent in April, while 23 percent
believe it�s getting better, down from 31 percent in April; 16
percent say it�s staying the same; and 4 percent weren�t sure.
- 53 percent of small business
owners say they plan to decrease spending on business development
over the next six months, an increase over the 46 percent in April
who said the same. Twenty-two percent plan to increase spending,
which is largely unchanged from 21 percent in April; while the
number of owners who were not planning any changes in spending
dropped from 30 percent in April to 23 percent in May.
POLL: Small Business Owners Continue to Toil Harder Than Most
Americans, Even More During Tough Economic Times
As documented in previous Watch surveys, American small business
owners report working more hours, more days and more holidays than
their general public counterparts, and during the past year, that
gap has widened.
While the amount of days and hours on the job for the average
American have been relatively flat since 2007, the number of small
business owners who work more than 10 hours a day jumped from 30
percent in 2008 to 39 percent in 2009. In comparison, only 20
percent of average workers make the same claim.
When it comes to days worked per week, 61 percent of small
business owners said they work six or more, up from 45 percent in
2008 and 43 percent in 2007. Comparatively, only 22 percent of
workers in the general population say they work more than five days
a week.
�The economy has obviously been a factor for small business
owners caught in the slowdown; they�re grinding out more hours
serving existing customers and likely putting in more time looking
for new business,� Scully said.
More Work Survey Results:
- Given their heavy work
schedules, small business owners are finding less time for vacation
than in years past. Today, only 29 percent say they have taken a
vacation in the past year that lasted a week, down from 40 percent
in May 2008 and 41 percent in May 2007. Thirty percent say it�s
been four years or more since they had a vacation that lasted a
week, up from 23 percent in both 2008 and 2007.
- 56 percent of small business
owners say that the economy has caused them to postpone or cancel
vacation time this summer, compared to 45 percent of the general
population who said the same.
- 27 percent of small business
owners define a day off as not working at all, followed by 37
percent who say a day off means not actively working, but available
for calls and e-mails; 25 percent define it as working an hour here
and there; 7 percent said it�s working all day, but from a remote
location; and 3 percent weren�t sure how they would define a day
off. In the general population, 54 percent of people define a day
off as not working at all.
- 57 percent of small business
owners say they always or most of the time work on holidays, up
from 47 percent in 2008.
- 31 percent of the general public
says they always or most of the time work on holidays, up from 29
percent in 2008.
- The spouses of small business
owners haven�t changed their opinions much since 2007 on whether
they approve of checking work e-mail when away: 56 percent approve,
19 percent disapprove and 24 percent aren�t sure.
- Spouses in the general public
seem to be getting much more used to the idea of checking work
e-mail when off: In 2007, only 21 percent of spouses approved of
the practice, while 74 percent disapproved and 5 percent weren�t
sure. This year, 39 percent of spouses approve, 22 percent
disapprove and 39 percent aren�t sure.
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
have 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 750
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 2006. In addition to generating the index, the Small
Business Watch surveys small business owners every month on key
issues, and polls 3,000 consumers four times per year to gauge
purchasing behavior and attitudes towards small businesses. For
past results and 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. Since its inception
in 1986, the company has become one of the largest card issuers in
the United States. The company operates the Discover Card,
America's cash rewards pioneer, and offers student and personal
loans, as well as savings products such as certificates of deposit
and money market accounts. Its payments businesses consist of the
Discover Network, with millions of merchant and cash access
locations; PULSE, one of the nation's leading ATM/debit networks;
and Diners Club International, a global payments network with
acceptance in 185 countries and territories. For more information,
visit www.discoverfinancial.com.
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