U.S. Small Biz Owners Pessimistic Post-Election
Gallup conducts a quarterly survey that measures how small businesses feel about their present situation and what they're planning in the months ahead. Until 2008, the index scores were generally higher than 100. Now:
- One in five small-business owners (21%) expect the number of jobs at their company to decrease over the next 12 months, the highest percentage Gallup has measured to date.
- One in three owners (34%) expect their company's capital spending to decrease over the next 12 months -- the highest recorded since July 2010.
- Thirty percent of owners expect "poor" cash flow over the next 12 months -- the highest Gallup has measured to date.
- Twenty-eight percent of owners expect to be in a "poor" financial position 12 months from now -- the highest Gallup has measured to date.
This must be related to why so many of my friends and family are reporting that they're facing layoffs. I hate that this happens just before Christmas, too.
Gallup's analysis:
One of the more stunning aspects of the November survey results is the decline in small-business owners' optimism for the future. As entrepreneurs, small-business owners tend to be optimistic by nature, and relatively more optimistic about the future than the present. Given this context, owners' increasing pessimism toward their future not only reflects uncertainty, but also may imply a weakening economy going forward.
Owners' intent to reduce capital spending in the months ahead is consistent with a slowing economy. Small-business owners appear to be uncertain about their future operating environment, and uncertainty is a legitimate reason for them to hold back on new capital expenditures at this time.
Another troubling finding is the intention of 21% of small-business owners to reduce the number of jobs at their company over the next 12 months. This suggests the potential for a significantly higher unemployment rate in 2013 and all of the accompanying negatives that fewer jobs imply for the economy -- particularly given the importance of small-business hiring to the U.S. job market.
Overall, the Wells Fargo/Gallup Small Business Index survey results suggest the U.S. economy is extremely fragile -- and possibly susceptible to another recession. Policymakers need to keep this acute fragility in mind as Washington struggles to avert the "fiscal cliff."
I pray everyone at Ricochet is able to withstand the decline and provide for their families.
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Comments:
Nov '12
Re: U.S. Small Biz Owners Pessimistic Post-Election
My first job out of college (with my newly minted Master's Degree) was at a small start-up during the heady dot-com days. The company had 9 employees when I started (I was employee #9, not to be confused with client #9) and when I left (18 months later), the company had 30 employees spread across 2 states. When the dot-com bubble burst, that company let go half of its employees and shrank back to a single state operation.
I now work for a large Fortune 100 company and one very clear experience from those days was just how sensitive small businesses are (no matter their product or service) to the external economic climate.
The dot-com burst was bad but it was contained to a single sector of the economy (for the most part). Given the effort our politician's are putting in to deal with the big macroeconomic issues of the day (that is, none at all), I can see the coming fiscal-cliff induced recession causing a lot of destruction for innocent people....my prayers go out to all small business owners and their employees during this season of economic hardship ....
Jun '12
Re: U.S. Small Biz Owners Pessimistic Post-Election
While I work for a large company, it's in an industry that's really threatened by the Obamaites -- health insurance.
So, I'm not sure what my employment future is.
Dec '10
Re: U.S. Small Biz Owners Pessimistic Post-Election
I followed Derb's advice and got a government job. Of course, with growing kids, fluctuating food and fuel prices, and my family's spending valiantly defying entropy, even being a government mule isn't all it's cracked up to be. If it's hard for me, I really fear for those in the real world.
Jun '12
Re: U.S. Small Biz Owners Pessimistic Post-Election
I wonder how much of this pessimism is due to Obama's demands for higher taxes on "the rich" which includes a lot of successful small business people?
Sep '12
Re: U.S. Small Biz Owners Pessimistic Post-Election
You'd think there'd be a rise in part-time work, hiring people who don't get benefits and are 'at will' workers. But even that kind of hiring is not happening, it appears...
Jun '11
Re: U.S. Small Biz Owners Pessimistic Post-Election
Anecdotally....the small business people I've talked to, in construction-related businesses, are worried. Very worried.
But we must be wrong! On the TV news last night they said the economy is going gangbusters.
Jul '11
Re: U.S. Small Biz Owners Pessimistic Post-Election
I mentioned this to a group a liberal friends I work with. They were absolutely giddy. It seems that they believe that this means that Obama is doing his job right and have business right where they need to be. They look forward to the day that businesses will share their profits with the employees since they are the ones that actually do the work. When I mention that the economy is bad and this looks like it is getting worse they look at me like I am an idiot. Everybody knows the economy is doing ok, Obama said so. All hope is lost.
Sep '12
Re: U.S. Small Biz Owners Pessimistic Post-Election
I know! It's like the narrative trumps reality!
Jojo: Anecdotally....the small business people I've talked to, in construction-related businesses, are worried. Very worried.
But we must be wrong! On the TV news last night they said the economy is going gangbusters. · 28 minutes ago
Aug '10
Re: U.S. Small Biz Owners Pessimistic Post-Election
File this under "things that surprise absolutely no one who does real world work".
Aug '10
Re: U.S. Small Biz Owners Pessimistic Post-Election
While I don't expect to lay off any employees or experience a downturn in revenue next year, I am putting plans to open another location on the shelf.
Why should I take the risk and do all the hard work necessary to expand when I can realistically expect to only keep 30-40 cents of every dollar I earn from expansion?
I'm no different from thousands of other small business owners. Good luck growing an economy with those consitions in place. This is an economic principle that socialists like Obama and Gov. Mark Dayton simply don't understand.
Edited on November 30, 2012 at 8:03pmMay '10
Re: U.S. Small Biz Owners Pessimistic Post-Election
Who cares.
Where's my government check?
Edited to add...Remember, it's Bush's fault. Can't you tell by the graph?
Edited on December 1, 2012 at 3:01amSep '11
Re: U.S. Small Biz Owners Pessimistic Post-Election
One of our sons is a cook in a restaurant chain. He is scraping by. The place he works is hiring a couple of new cooks. Probably so they can cut back the hours of the ones they have when Obamacare kicks in. Don´t know how he will scape by on less than 30 hours a week.