Small-Business Mood Tanking
The crisis on Wall Street continues to drag economic confidence among smaller business owners to record lows, Discover reported this week.
Of 1,000 small-business owners recently surveyed, 64 percent described the economy as poor, up from 57 percent last month. At the same time, 53 percent said economic conditions were getting worse for their businesses, up two percent from September. Both readings are the highest recorded in the credit card firm's monthly small-business confidence index since it was launched in 2006.
While more business owners this month said they believed the economy was getting worse, the number of those detecting an improvement rose a few points to nine percent, the survey found. Similarly, fewer owners were experiencing cash flow issues.
"The cash flow issue is pretty consistent, and I think it speaks to small-business owners' resiliency and their independence from what's going on in terms of Wall Street," said Ryan Scully, director of Discover's business credit card.
Scully said the economic slowdown hasn't forced owners to borrow more cash as yet, though many are taking home less from their paychecks.
More than half of the owners surveyed said they didn't expect the government's $700 billion financial market rescue plan to affect their businesses, while 70 percent said they weren't confident in the government efforts to address their needs.
Though the economy continued to rank highest as an election issue for small-business owners, 15 percent were also concerned with government ethics and corruption, nearly double the number in September, the survey found.
"We've heard a lot about the public starting to blame the government a little bit for not getting involved early on in some of the Wall Street crises, and we're attributing some of the jump to that," Scully said.