Discover® Small Business WatchSM: Small Business Confidence Falls Again in July
26 Luglio 2010 - 3:09PM
Business Wire
Small business owners’ economic confidence fell for the second
month in July as a higher percentage of small business owners rated
the current economy as poor and see it only getting worse,
according to the Discover® Small Business WatchSM. The index
dropped to 83 in July from 86.1 in June. It has been below 83 only
once since the beginning of the year.
In July, 58 percent of small business owners rated the economy
as poor, up from 51 percent in June, while 7 percent rated the
economy as excellent or good, down from 12 percent in June.
“Even though cash flow issues eased off in July, small business
owners still aren’t feeling any positive effects from anything
going on in the bigger economy,” said Ryan Scully, director of
Discover’s business card, who commissions the monthly research.
“They’ll be holding back their economic enthusiasm until they have
tangible evidence that their bottom lines are improving.”
Although it wasn’t part of the confidence index calculation, an
additional question in July revealed that 75 percent of small
business owners believe it is likely or highly likely that the
economy will slip into another recession before it fully recovers,
with 15 percent believing another recession is not very likely to
happen and 10 percent feeling unsure.
Other July Confidence Indicators:
- 57 percent of small business
owners said the economy is getting worse, up from 51 percent in
June; 27 percent think the economy is getting better; 14 percent
think it is the same; and 3 percent are not sure.
- 45 percent of small business
owners report economic conditions for their businesses were worse
in July, up from 43 percent in June; while 30 percent of
respondents said conditions were better; 22 percent reported
conditions were the same and 3 percent weren’t sure.
- In July, temporary cash flow
issues declined as 49 percent of small business owners reported
that their businesses did not encounter any temporary cash flow
issues that caused them to hold off on paying some bills in the
past 90 days, up from 45 percent in June; 47 percent did encounter
cash flow issues, down from 51 percent the prior month.
- 28 percent of small business
owners reported they will increase spending on business development
over the next six months, up from 25 percent in June and the most
since September 2008.
Small Business Owners Have Higher Disapproval Ratings for
Obama, Congress
Sixty percent of small business owners either somewhat
disapprove or strongly disapprove of how President Obama has
handled the economy, up from 52 percent in 2009; while 39 percent
strongly or somewhat approve, down from 47 percent last July.
Consistent with previous polls, the Watch found small business
owners remain unconvinced that Washington can be of any help: 68
percent reported that they are not very confident or not at all
confident that the federal government and Congress can address
their needs, up from 65 percent in 2009.
Record Number of Small Business Owners Taking Home Less
Pay
Seventy-three percent of small business owners surveyed also
report current economic conditions have caused them to take home
less money in July, up from 69 percent in July 2009 and 55 percent
in February 2008, when the Watch first posed this question.
Pricing has been adjusted by 37 percent of small business owners
in the past six months to reflect higher costs, up from 35 percent
in July 2009. Fifty-five percent of owners did not adjust pricing,
down from 60 percent in 2009.
Fewer small business owners reported borrowing money to pay
bills or applying for new credit cards, lines of credit or loans in
July. This year, 27 percent reported borrowing money in the past
six months to pay bills, down from 33 percent in July 2009, and 71
percent did not need to borrow money to pay bills, up from 65
percent last July. Only 10 percent of small business owners
surveyed applied for new credit cards, lines of credit or loans
over the past three months, down from 17 percent in 2009; 89
percent did not apply and 2 percent weren’t sure.
SBA Stimulus Loans Untapped by 97% of Small Business
Owners
Ninety-seven percent of small business owners did not apply for
stimulus funded SBA loans in the past year even though 50 percent
were in favor of the expansion of an SBA loan program last year and
31 percent said they would consider applying for funds.
Despite so few small business owners taking advantage of the SBA
program in the past year, 27 percent of small business owners said
they would apply should more funding be made available in the next
six months, while 65 percent would not apply and 8 percent weren’t
sure.
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 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
Discover Financial Services (NYSE: DFS) is a direct banking and
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 personal and student loans, online savings
accounts, certificates of deposit and money market accounts through
its Discover Bank subsidiary. Its payment businesses consist of
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 more than 185 countries and territories. Visit
www.discoverfinancial.com.
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