Wednesday, November 28, 2012

More Than Just the Fiscal Cliff to Worry About

In there's one thing that people on both sides of the aisle can agree on it's that small businesses play a critical role in job growth and economic prosperity.

For Small Firms, Election Results Dampen Optimism:

The results of the presidential election dampened the spirits of many small-business owners who now worry that forthcoming federal policies, including potentially higher taxes and health-care reform, could stunt growth and hiring at their firms.

A November survey from Vistage International Inc. and The Wall Street Journal found a significant drop in optimism compared with the months leading up to the election, as respondents anticipated a worsening economy in 2013.

The survey's overall confidence index, based on responses of 740 small-business owners, fell to 83.9 from 95.3 in October. That is the lowest in the survey's six-month history.

Specifically, the survey's index of expected economic conditions fell to 77 from 105, a result of 43% of the respondents anticipating worse U.S. conditions in the next 12 months. That is nearly twice as many as October's 23%. The index of business profits also fell to 122 from 135 as only 43% of owners anticipate higher profits in the coming year, down from 50% last month.

It's difficult to know which way the economy is going to go in 2013 as there are signs that point toward a strengthening recovery and others that indicate another recession may be in the works. File this pessimistic small business owner survey among the latter.