Report: Small businesses losing confidence in economy

“Small-business owners are feeling less confident in nearly every way, particularly with banks’ ability to keep their money safe,” NSBA President Todd McCracken said in a news release accompanying the report, which was released Sept. 19. “Decreasing home values, a tight credit market and failing financial institutions have led to 67 percent of small-business owners who believe that the U.S. economy is worse off today than it was five years ago.”

A similar percentage of small-business owners reported that insurance provided by the Federal Deposit Insurance Corp. – up to $100,000 per account holder per bank – does not adequately protect their business accounts, and 60 percent have already or are considering taking action such as spreading deposits across multiple institutions to reduce their financial risk, according to the release.

Rising energy costs also have been a persistent problem for small businesses surveyed by the association.

Nearly nine out of 10 small-business owners polled in August said energy costs have

had a negative impact on their business. Nearly half – 47 percent – of them have reduced business travel and 42 percent have increased prices, according to the report.

Survey respondents’ top three concerns were economic uncertainty at 53 percent, health insurance costs at 46 percent and federal taxes at 34 percent.

“Despite the relatively bleak outlook for the U.S. economy as a whole, 75 percent of small-business owners today are confident about the future of their own business,” David Ickert, NSBA Economic Development Committee chair and owner of Texas-based Air Tractor Inc., said in the release. “Although that’s certainly positive, we cannot afford to ignore the fact that one-fourth of small-business owners are not confident about the future of their business.”

The report’s findings were based on responses from a sampling of NSBA members on their current economic outlook, job and business growth, business financing and several other key economic indicators for small businesses, according to the release.

The full report can be viewed at www.nsba.biz.