Small Business Economic Confidence Continues To Slide 2 in 3 Small Business Owners Rate Economy as Poor; 3 in 4 See It Getting Worse

October 2008

• Download Data (doc)
• Download Press Release (doc)
•  Print

The Discover^® Small Business Watch^SM   dropped for the second straight month as news of a congressional rescue plan failed to lift the spirits or expectations of the nation’s 22 million small business owners. The index slipped 3.2 points in October to 71.4, the lowest confidence rating since the Watch was established in August 2006.  

"Faced with a barrage of bad news about financial markets and the economy, small business owners continue to tell us that there is no end in sight to this economic crisis.   For the first time, we saw more than 60 percent rate the economy as poor," said Ryan Scully, director of Discover's business credit card. "Most of their plans to invest in their businesses have been on hold for some time."

Learn more about the research methodology for the Small Business Watch.

October Highlights

• 64 percent rate the economy as poor, up from 57 percent in September and the highest rating in this category in the history of the Watch; 8 percent rate the economy excellent or good.
• 53 percent believe economic conditions for their businesses are getting worse, up from 51 percent in September and equaling the all-time high in the history of the Watch
• The number of small business owners who think the U.S. economy is getting worse rose one point to 74 percent in October; 9 percent feel the economy is getting better, up slightly from last month’s record low 7 percent.
• 38 percent of small business owners say they have experienced cash flow issues over the last 90 days, down from 42 percent in September.
• 23 percent plan to increase spending on business development over the next six months, down from 28 percent in September and equaling an all-time low in the Watch; 42 percent plan to decrease spending compared to 44 percent last month; and 33 percent anticipate making no changes, up from 26 percent in September.

POLL: Majority of Small Business Owners Disagree with Wall Street Bailout

• Fifty-seven percent of small business owners say they disagree with the $700 billion economic rescue plan that was approved by the Congress and signed by the president earlier this month.
  
  "As we have seen in previous Watch surveys, events on Wall Street do not necessarily reflect the reality for small businesses. That may be one reason so many don’t see this rescue plan as bringing much benefit to their business,” Scully said. “They seem to have little faith that the government knows how to answer the needs of America’s small business owners."
  

Other Economy Poll Highlights:

• The economy remains the biggest election issue for small business owners, by far outpacing every other major campaign issue combined.
  
• In September, 52 percent of small business owners said that the economy is the top issue in this election, up significantly from 35 percent in January; national security and the war in Iraq each garnered 10 percent this month; followed by government ethics and corruption, 8 percent; immigration, 8 percent; and healthcare, 4 percent.
  
  "When it comes to this election, it’s clear that the state of the economy is the biggest issue, but owners are pretty divided over which party is best equipped to help them, and whether they expect any help at all," Scully said.
  
• When it comes to getting help from the next president, small business owners are split: 45 percent said they were very confident or somewhat confident that the next president will improve operating conditions for small business owners, and 44 percent were either not very confident or not at all confident in the next administration.
  
• As for which party best represents their interests, 43 percent said Republicans, 40 percent said Democrats; 5 percent think some other party has the answers and 12 percent were not sure.
  
• The last time small business owners were asked the same question in October 2006, 41 percent said Republicans and 33 percent said Democrats. 
  

The Discover Small Business Watch is a monthly index of the economic confidence of the nation's 22 million businesses with 5 or fewer employees. Learn about our small business research methodology.