With the economy the main focus of the upcoming 2012 elections, pollsters are providing small business owners a multitude of valuable information regarding the economy. In nearly every business, the way people feel about the economy drives their purchasing decisions. When the economy is seen as strong, spending rises but when it is viewed as struggling, consumers and businesses alike hold on to their money in fears that the economy may get worse. Often, the state of the economy based on more objective measures like inflation, GDP, and foreclosure rates aren’t as important as how people feel.
Another survey conducted by U.S. Bancorp asked small business owners what they thought of the current economy. With small business owners responsible for most of the job creation, their opinion of the economy is arguably more important than the leaders of larger businesses and politicians. In that survey, 78% of those asked stated that they believe that the economy is still in a recession. This is down from 89% in 2010.
Additionally, 70% of small business owners have no short term plans to hire employees. When asked why, 26% said that they are uneasy about where the economy is going in the next 12 years while 16% cited poor sales, and 12% cited government regulations. Finally, in the past six months, only 20% of small business owners reported attempting to borrow money for their business. This speaks to little desire to expand the business in such a challenging economic environment.
One of the few positive facts coming from small business owners’ opinion of their local bank. 43% of those surveyed said that they see their bank has helpful. That number is up from 32% in 2010. Experts that small businesses have better opinions about their banks because banks are beginning to see a recovery and know that small businesses will soon be looking for loans and they want to be seen as small business friendly in order to get the most market share they can from these loans. Banks may be stepping up their efforts to be more customer friendly. Money is still extraordinarily cheap for banks which gives them the potential to profit significantly from business loans.
One thing is for certain: The way people view the economy is fickle. From the average consumer up to the professional economist or investor, views are always changing but through all of the surveys that seem to show conflicting views, there is one key fact that is shared by all of the surveys of late: Our economy still has a long way to go.