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The National Small Business Association (NSBA) today released its Mid-Year Economic Report, a snapshot of how small businesses are faring today. Unfortunately, small-business owners are less optimistic about the outlook of their own firms and the overall economy than in the previous six months.
“While the dip in outlook is in-line with cyclical drops in optimism mid-year, there’s more to it,” stated NSBA President and CEO Todd McCracken. “The constant barrage of negative campaigning and near-complete failure of Washington to govern is having a broad, negative effect on America’s small businesses.”
Six months ago, the number of small-business owners who anticipated a recessionary economy was just 14 percent—today that number has jumped to 34 percent, the highest it’s been since December 2009. Correspondingly, the number of small-business owners who anticipate economic expansion in the coming 12 months was cut nearly in half from 20 percent six months ago to 11 percent today.
One bright spot: the long-term economic outlook is slightly improved with 23 percent now saying that today’s economy is better than it was five years ago, the highest it’s been in four years.
Unfortunately the near-term outlook shows that 44 percent of small-business owners think the national economy is worse today than it was six months ago—up from 31 percent in December 2011. Furthermore, the number of small-business owners who are not confident about the future of their own business jumped from 25 percent six months ago to 40 percent today, the largest increase in nearly five years.
In terms of employment, there was a modest decrease in the past six months from 22 percent who increased their employee size six months ago to just 19 percent today—although a decrease, there wasn’t the level of drops seen in other indicators.
“Given that economic uncertainty is the most significant challenge small-business owners face today, it should come as no surprise that addressing the deficit is the number one thing small businesses want policymakers to address,” said Chris Holman, CEO of Michigan Business Network.com and President of The Greater Lansing Business Monthly.