Small Business Watch
June 2008
Economic Confidence Drops to New Low, Nearly 8 in 10 Feel Economy is Getting Worse
After a brief rebound in May, economic confidence among small business owners dropped to a record low in June as the number of those who think the U.S. economy is getting worse expanded to nearly 80 percent. The Discover Small Business Watch plummeted in June to 71.8, down 10 points from 81.8 in May.
Highlights:
Nearly eight out of 10 small business owners, 79 percent, think the U.S. economy is getting worse – an increase from 71 percent in May and the highest level recorded since the inception of the Watch in August 2006.
53 percent of owners say that economic conditions for their business are getting worse, compared to 47 percent in May.
58 percent rated the economy as poor, an increase from 50 percent in May.
42 percent say they have experienced cash flow issues over the last 90 days, an increase from 39 percent in May.
75 percent of owners will be decreasing or making no changes in what they spend over the next six months on business development activities such as advertising, inventories, and capital expenditures. Forty-five percent plan to decrease spending, 30 percent are making no changes, and 23 percent plan to increase spending.
8 percent of owners have plans to hire in the next few months, while 79 percent are making no changes and 10 percent plan to lay off workers.
Is the American Dream Still Within Reach?
Only 40 percent of the 4,000 consumers polled by the Watch people think the American Dream is still a possibility, 11 percent aren't sure, and 48 percent said the dream is dead. However, if you're going to try, 58 percent of consumers say owning a small business is one way to go, while small business owners are more certain: 71 percent of them feel like they have a doorway to prosperity and a better life for their families.
