Confidence in the economy among small business owners is at its lowest point in 18 months, according to a new monthly survey by Riverwoods-based Discover Financial Services.
The August survey of 750 small business owners nationwide revealed that 62 percent of them believe the economy is getting worse, and 55 percent – a record number – expect economic conditions for their business to be unfavorable in the next six months. Discover said these factors caused its Small Business Watch index to drop 10 points between July and August, its largest month-on-month decline since November 2009.
August was also the third consecutive monthly decline for the index, which surveys business owners with fewer than five employees.
The survey also showed that 52 percent of small business owners are planning to decrease their spending in the next six months, up from 45 percent in July. A record low of 17 percent said they will increase business development spending during the same period, compared with 28 percent in July.
“There’s growing concern that the economy is stuck in neutral, or even sliding, and small business owners definitely reflected that sentiment this month,” Ryan Scully, director of Discover’s business card, said in a statement accompanying the survey results.
