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Cash-flow problem appears on decline; confidence increases

Economic confidence among small business owners rose slightly in June as cash flow concerns abated and the mood ondiscover1 the economy held steady, according to the latest Discover Small Business Watch. The monthly index rose to 80.9, up from 78.1 in May. The monthly index is compiled from interviews and surveys of small business owners who employ five or fewer people.

“Cash flow problems are back to levels that are more in line with what we’ve typically seen since the Watch began nearly three years ago,” said Ryan Scully, director of Discover’s business credit card. “Cash flow concerns usually erode confidence because they represent something tangible to a business owner, more so than an expectation or perception about the economy.”

The June results include:

·         42% of small business owners say they have experienced temporary cash flow issues in the past 90 days, down from May’s record high of 49%.

·         26% believe economic conditions are improving, up from 23% in May, while 57% believe conditions are getting worse, which is unchanged from the previous month; 14% said the economy is staying the same, and 4% weren’t sure.

·         59% of small business operators rate the economy as poor, down 1% from May, while 8% rate the economy as excellent or good, and 30% called it fair.

·         49% of owners see economic conditions for their businesses getting worse, up 1%age point from May; 25% see conditions improving, also up 1%age point; 22% say conditions are the same; and 4% weren’t sure.

Source: Discover Financial Services


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