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The National Small Business Association (NSBA) today released its 2011 NSBA Mid-Year Economic Report which shows that, despite a few bright spots including measured growth in past and projected hiring, America’s small businesses have diminishing confidence in both the U.S. economy and the future of their own firms.
“Eighty-eight percent of small-business owners anticipate a flat or recessionary economy in the coming year, the highest it’s been in two years,” stated NSBA President Todd McCracken. “This negative economic outlook is causing a growing lack of confidence among small-business owners.”
Contrary to a more positive outlook back in December, 45 percent of small businesses today—up from 40 percent—said they expect no growth opportunities whatsoever in the coming year. Thirty-six percent of small businesses report an inability to garner adequate financing, and 19 percent—up from 13 percent six months ago—are paying credit card interest rates of 20 percent or higher. The rising cost of health care continues to plague small businesses with nearly one third reporting they held off on hiring a new employee due to those costs.
When asked which issues are most important for policymakers to address, small businesses ranked reducing the national deficit, reducing the tax burden, reigning in the costs of health care reform and regulatory reform their top priorities.
“Nearly one in three small-business owners named the growing U.S. debt the number one challenge facing their business,” stated Larry Nannis, CPA, NSBA Chair and shareholder at Levine, Katz, Nannis + Solomon, P.C. “Lawmakers ought not downplay the ramifications of the ongoing deficit debate—and lack of a long-term solution—on America’s small-business owners.”
Although the general sentiment of the small-business community is one of concern and economic uncertainty, there were a few somewhat positive developments. Small businesses reported modest gains in employment resulting in the lowest net decrease in employment in three years. Furthermore, there was an increase in the number of small businesses that projected hiring in the coming 12 months.