Small Business Owners Still Cautious on Economic Outlook

Economic confidence among small business owners was off slightly for December,
down a half-point from the previous month, as small business owners expressed
less confidence that economic conditions are getting better, either in the
general economy or with their own businesses. At 92.7, the Discover Small
Business Watch is down from 93.2 in November, a full 17 points lower than at the
same time a year ago.

"The Index hasn’t moved enough this month to be of too much concern," said
Sastry Rachakonda, director of Discover’s business credit card. "The mood
remains cautious as fewer small business owners feel like economic conditions
for their businesses are getting better.

December Key Findings:

  • 28% of small business owners feel that economic conditions for their own
    business are getting better. The percentage has been steadily decreasing since
    September, when 40% of owners felt conditions were improving.
  • 65% of small business owners feel that economic conditions in the U.S. are
    getting worse, slightly fewer than the 68% who felt that way in November. The
    number who believe it is getting better remained the same.
  • 42% said they have experienced cash flow issues over the last 90 days, an
    increase from 38% in November but even with 42% from December 2006.
  • Plans for spending on business development increased this month, with 32% of
    owners planning to increase spending on activities such as advertising and
    inventory, compared with 29% in November, but lower than 37% in December 2006.

Source: Discover Financial Services

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