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NSBA today released its 2010 Year-End Economic Report which shows the small-business community is on the path to recovery. The report shows the largest gains in small-business hiring and revenues in two years, and a slight thawing of credit markets. Additionally, small-business owners’ confidence in the future of their own business rose from 59 percent to 66 percent.
“Although the overall tone in the small-business community has improved in the last six months, there still are many challenges ahead,” stated Todd McCracken NSBA president and CEO. “Economic uncertainty, health insurance costs and lack of available capital continue to hold small businesses back.”
Despite a slight thawing in credit markets—64 percent of small businesses report being able to obtain adequate financing for their business up from 59 percent six months ago—fully one-third of small-businesses cannot get the financing they need. This lack of capital is hampering growth opportunities: 13 percent of small businesses were unable to increase inventory to meet demand and 18 percent said they could not finance increased sales.
On a more positive note, the number of small businesses reporting an increase in revenues rose from 26 percent in July to 39 percent in December—the largest increase reported since July 2008. Also for the first time since July 2008, a majority of respondents (54 percent) are projecting an increase in revenues in the coming 12 months. The number of small businesses who report hiring new employees rose from 11 percent to 15 percent, and 25 percent expect to hire in the coming year. Unfortunately, the number of small-business owners projecting no change in employment in the coming year is at its highest point in nearly three years.
Most small-business owners (65 percent) expect the U.S. economy to be flat in the coming year, however those expecting a recession was more than halved, from 29 percent down to 13 percent. When it comes to small businesses’ opinions on policy, the top issues they think Congress needs to address are: reducing the national deficit, reducing tax burdens, reigning in the cost of health care reform, reducing regulatory burden and increasing small-businesses access to capital.
“Small businesses are faring a little better, but we’re far from where we need to be,” stated Larry Nannis, CPA, NSBA chair and shareholder at Levine, Katz, Nannis + Solomon, P.C. “Lawmakers must abandon partisan bickering and work together on advancing nonpartisan, pro-small-business initiatives such as repeal of the expanded 1099 reporting provision.”
The 2010 Year-End Economic Report survey was conducted Dec. 20, 2010 through Jan. 10, 2011 among 450 small-business owners across the country. Please click here to read the full report.