making nEws
How Do Small-Business Owners Feel?
U.S. Economic
Like a vacation!
Recovery in sight?
I
n a rare bit of optimistic news,
a recent national survey of
business economists finds the
U.S. economy is expected to rebound
T
wo conflicting reports confidence levels in today’s economy.
— however slight — by the end
paint a nebulous picture According to the Wells Fargo/Gallup
of this quarter as credit markets
of small-business owners’ Small Business Index, optimism
improve after a year of turmoil.
continues a five-quarter decline,
According to a National Association
dropping 35 points since January
for Business Economics survey, the
and hitting the lowest level since
worst of the U.S. credit crunch and
the survey began.
housing slump is almost over, and
Conversely, the Discover® Small
growth will pick up to 2.1 percent
Business Watch indicates that the
in the second half of 2008. In
steady decline in economic confidence
addition, more than 60 percent
halted in May, when the number
of the 52 professional forecasters
of owners with cash flow issues
surveyed predict businesses and
decreased to the lowest total
consumers will find it easier to
in six months.
borrow in the year’s last six months.
In fact, the Discover Watch
“We are most of the way through
rose more than 5.5 points in the downturn, or the worst of it,”
May to 81.8, up from 76.1 in says Lynn Reaser, a Bank of America
April. And just 39 percent Corp. economist who also chairs
of those surveyed say the economic survey committee.
they’ve experienced “Recovery forces are in place and
cash flow issues during conditions should improve over
the last 90 days, down the next year and a half.”
from 44 percent in April Although second-half growth
and 47 percent in March. forecasts were cut to 2.1
Depicting a completely percent from 2.8 percent
different picture, the Wells in February, about
Fargo Index dropped 75 percent of
to 48 in April — the those predicting a
lowest level reported recession this year
since the inaugural think it will end in the
survey in August 2003. second or third quarter.
In fact, the Index shows The NABE survey points
significant decreases in to gradual improvement
small-business owners’ into 2009, when U.S. gross
future cash flow expectations. domestic product may
Confident or not, small- increase 2.7 percent, down
business owners remain slightly from the February
steadfast about vacations. prediction of 2.9 percent.
According to a semi-annual “Although housing and
survey from American Express, almost credit markets will gradually loosen
60 percent of small-business owners their grip, U.S. economic growth is
are planning a week’s vacation this expected to only slowly return to
summer — the same as last year. health,” says Ellen Hughes-Cromwick,
However, 20 percent do plan to the group’s president and chief
OSS
reduce the expense of their get- economist at Ford Motor Co.
aways because of the economy. For more, visit
nabe.com.
NOEL R
12 I July 08 I Growing Wealth I
growingwealthmag.com
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