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Survey: Small biz confidence rises for third month

Economic confidence among the nation’s small business owners continued to improve in November, according to the Discover Small Business Watch. The monthly index rose to 87.2 in November, up 3 points from 84.2 in October — the third consecutive monthly gain, and nearly 11 points higher than a year ago.

Cash-flow concerns were at their lowest level in 17 months: 43% of small business owners experienced cash flow issues in the past 90 days, down from 46% in October. The highest this percentage has ever reached was 53% in August 2010 and July 2009; the lowest it has ever been was 32% in January 2007.

“We see slight improvements in nearly every survey category of the index, with significant improvement in the confidence of small business owners who sell consumer goods and services,” said Ryan Scully, director of Discover’s business card. “There would appear to be some measurable hope for the holidays that business will improve. Even still, there’s no getting around the fact that 59% of America’s small business owners still rate the economy as poor.”

The subset direct-to-consumer segment of small business owners registered a confidence index of 89.6 in November, up from 83.6 in October, and 65.6 in August. The November index for this segment is the second highest recorded since October 2007.

Other November Confidence Indicators:

  • 25% of small business owners reported they will increase spending on business development in the next six months, up from 22% in October; 40% will decrease business development spending in the next six months, down from 46% in October; and 28% don’t plan any changes.
  • 33% believe the economy is getting better, up from 31% in October and the highest since May; while 46% believe the economy is getting worse, down from 48% in October; 17% believe it’s staying the same, equal to last month; and 4% are not sure.
  • 59% rate the current economy as poor, 30% rate it fair, 6% rate it as good and 4% rate it excellent.

Expectations Rise for the Holiday Season

The number of small business owners expecting more business over last year was 19% in November, up from 11% in 2009 and doubling from 9% in 2008. On the flip side, 32% of small business owners expect less business this holiday season, a drop from 2009 when 46% expected less holiday business. Forty-five percent of business owners expect business to be about the same as last year.

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