(Source: Business Wire)
Economic confidence among small business owners jumped to its highest level in 18 months in August as more owners expressed faith that the U.S. economy is on the rise and gave signs that they are more willing to invest in advertising and new inventory, according to the latest Discover® Small Business WatchSM. The index rose to 89.8, up 7.7 points from July and the highest level since 90.9 in February 2008.
"For the past few months, small business owners have shown rising confidence in the overall economy, as well as an increasing sense that the conditions for their own businesses are improving," said Ryan Scully, director of Discover's business credit card. "This month we have a few more signs that they may be ready to start trying to grow their businesses again, and that the worst may be over."
August Highlights:
The number of small business owners who think the economy is getting worse dropped to 43 percent in August, the lowest reading on that data point since the Watch's inception exactly three years ago. This month, 38 percent of owners say the economy is getting better, up from 30 percent in July; 15 percent believe that the economy is staying the same, down from 16 percent in July; and 4 percent remain unsure.
48 percent of small business owners rate the economy as poor, which is the lowest percentage since February 2008, while 41 percent rate it fair and 9 percent say it is excellent or good.
30 percent of small business owners see economic conditions for their businesses improving, up from 29 percent in July; 44 percent see their own conditions getting worse, down from 46 percent in July; and 23 percent say the climate is unchanged.
27 percent of small business owners say they plan to increase spending on business development, such as advertising, inventory and capital expenditures, which is up from 23 percent in July; 43 percent plan to decrease spending, down from 49 percent in July; 25 percent are planning no changes; and 5 percent aren't sure.
51 percent of owners say they have experienced cash flow issues in the past 90 days, down from 53 percent in July.
Small Business Owners See Green Growth in Recovery
In a post-recession recovery, small business owners say so-called "green" industries show potential for growth opportunities, but few are employing green tactics in ways that help their bottom lines.
"When entrepreneurs look for opportunities in the post-recession economy, they see the most potential in green industries, technology, energy and business services," Scully said.
