By Karen Axelton
As election season begins in earnest, how are small businesses feeling about their own—and the nation’s–economic outlook? Capital One’s second quarter 2012 Small Business Barometer, a quarterly survey of U.S. small businesses, asked entrepreneurs about their current financial conditions and what they expect for the next six months, and found steady, but modest growth.
Gains that began in 2011 are continuing in 2012, the survey found. Some 45 percent of small businesses say their companies are facing the same economic conditions as last quarter, and 38 percent say their economic conditions have improved. Just 17 percent felt economic conditions were getting worse. Asked about their own businesses’ financial situation, 44 percent say it’s better than it was a year ago, 40 percent say it’s the same, and just 15 percent say it’s worsening.
What’s more, 37 percent of small businesses plan to add jobs in the next six months—a two-year high. Sixteen percent say they have job openings they can’t find qualified people to fill, a slight increase from the previous quarter.
As for the coming six months, small business owners are cautiously optimistic, rating the national business outlook at 6.0 out of a possible 10 points—mostly due to concerns about sales and profit margins. Reflecting this cautious attitude, most of the small businesses surveyed say they plan to keep spending, business development and investment consistent with current levels. Seven in ten will keep spending at the same levels—a two-year high, 9 points higher than last quarter and 5 points higher than last year. Just 15 percent of companies expect to increase business development and investment spending.
One positive sign is that one-fourth of small businesses have tried to obtain financing in the last 12 months—the highest percentage in the past nine quarters of survey data. While 42 percent of small businesses say getting financing is harder than it was six months ago, that’s down 10 points from the percentage who reported difficulty the previous quarter.
“We’re seeing some hesitancy and concern about prospects for the remainder of the year, as well as a limited line of sight to growth,” said Jon Witter, President, Retail and Direct Banking at Capital One. “Small business owners are moving forward with continued caution and pragmatism as they consider their plans and projections for the coming months.”
How does this outlook compare with your own? Are you feeling optimistic about the months ahead?
Image by Flickr user carlos.a.martinez (Creative Commons)