Small business owners’ confidence in the economy soured significantly from July to August in the largest one-month decline since November 2009, according to the Discover Small Business Watch released Monday, August 30.
The Small Business Watch confidence index plummeted to 73 in August from 83 in July, with 62% of small business owners saying the economy is getting worse and a record 55% of small business owners expecting economic conditions for their businesses to be unfavorable in the next six months.
In addition, according to Discover Financial Services’ national random monthly survey, 750 U.S. small business owners with less than five employees expressed a negative outlook for the economy in general and skepticism that conditions would get better for their businesses in the next six months.
“There’s growing concern that the economy is stuck in neutral, or even sliding, and small business owners definitely reflected that sentiment this month,” said Ryan Scully, director of Discover’s business card, in a statement. “With the economy seemingly unable to show sustained growth, and small businesses not expanding to create jobs, it’s no wonder that confidence is down.”
In a phone interview, small-business owner Bernie Kiely, president and chief compliance officer of Kiely Capital Management in Morristown, New Jersey, countered that many of his small-business clients are actually seeing more work come in, matching the modest U.S. economic recovery.
“I think small businesses have let go those people that they’re going to let go,” Kiely said. “In my case, an employee left and I have not replaced her. In 2009, my revenues were down 20% over 2008, and I’ve made back 5% of the 20%, so I’ve made back a quarter.”
The biggest concern, he added, is the slowdown in consumer spending.