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Survey: Small biz confidence rebounds

After falling in December, confidence among small business owners rebounded in January as more see the economy and economic conditions for their businesses improving, according to the Discover Small Business Watch. The monthly index rose to 91.0 this month, up 9.4 points from December 2010 and 5.5 points higher than one year ago, the highest the index has been since December 2007 when it stood at 92.7.

Thirty-one percent of small business owners say the economy is getting better this month, up from 25% in December; 41% say it is getting worse, down from 51% last month; 24% say it’s the same, up from 22%; 3% were unsure.

Small business owners’ views of economic conditions for their businesses in the next six months are also improving. Thirty-one percent of small business owners say economic conditions for their businesses are getting better, up from 25% the month prior; 38% see conditions getting worse, down from 43% in December; 26% say they are the same, even with December; 5% were unsure.

January Confidence Indicators

  • 30% of small business owners said they will increase spending on business development such as advertising, inventories and capital expenditures in the next six months, jumping 9 points to its highest point since March 2008. Forty percent will decrease business development spending, down from 42% last month; 27% do not plan any changes, down from 32%.
  • 57% of small business owners are reporting the economy as “poor”, down 5 points from last month. More small business owners report the economy as “fair”, up 4 points to 34%, and those who rate the economy as “good” is up 2 points to 7%. Just 2% report the economy as “excellent”, down from 3% last month.
  • 43% have encountered temporary cash flow issues within the last 90 days that have impacted their ability to pay bills on time, down from 45% last month, while 49% still are not encountering cash flow issues, flat with last month; 8% were not sure.

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