ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: Survey Shows Small Business Owner Optimism Lowest in Five Years

Wednesday, December 17, 2008

Survey Shows Small Business Owner Optimism Lowest in Five Years

Reprinted from The Monitor

According to the recent Wells Fargo/Gallup Small Business Index surveyed in November, small business owners’ optimism fell to its lowest level since the survey’s inception in 2003. The score now stands at 10, a 35-point drop since last quarter. The Index has been declining since mid-2007.

“The Index hit a record low last month, which appears to be the result of a sharp decline in consumer and business spending,” said Dr. Scott Anderson, senior economist at Wells Fargo. “Despite the significant decrease in overall optimism, four of every five small business owners said they did not perceive credit as difficult to obtain. It appears that the Fed’s injections of capital and liquidity in the banking system may be having some effect on maintaining credit flow.”

The Index dropped a total of 104 points from its highest score of 114, recorded in December 2006, and 73 points since January of this year. The Index is the sum of “current situation” and “future expectations” of small business owners for six key measures, including financial situation, cash flow, revenues, capital allocation, job hiring, and credit availability. The “present situation” score fell to three this quarter — down 16 points from the last survey conducted in July — and “future expectations” dropped to seven, down 19 points from July. Five out of the six measures contributed to the Index’s overall drop, with “cash flow” showing little change (both for present situation and future expectations).

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