This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Small-Firm Owners Still Waiting For Recovery

RIVERWOODS, ILL. ( TheStreet) -- Small-business owners have yet to experience the recovery some experts are pointing to this year, according to results from Discover Financial's (DFS - Get Report) Small Business Watch.

Three months into year, some small-business owners see the direction of the economy worsening and the climate for their businesses declining over the past two months.

Discover's monthly index, which gauges economic confidence, dropped to 86.5 in March, down from 90.2 in February.

More than half of those surveyed rated the economy as still in "poor" condition for the nineteenth consecutive month, up from 41% in February and the highest since September, according to Discover. Respondents who said the economy was improving fell to 27% from 34% in the prior month.

"Our surveys have shown that the economic events of the recent past have hit small businesses hard, and many are still struggling to sustain an individual recovery of their own," said Ryan Scully, director of Discover's business credit card. "Nearly a third of small-business owners told us they have contemplated going out of business sometime during the past two months, which is up from spring of 2008."

Discover's Small Business Watch measures the relative economic confidence of U.S. small-business owners with fewer than five employees. The survey, which polled a random sample of 750 business owners, is conducted by Rasmussen Reports, an independent survey research firm.

The segment consists of 22 million businesses producing more than a trillion dollars in annual receipts, Discover says.

More than three-quarters of the survey respondents answered that rising fuel prices have affected profitability.

Among those who have not experienced a comeback for their businesses from the recession, 14% said they may never recover.

Approximately 45% expect a recovery to take more than a year; 16% say they will recover in six to 12 months; 10% predict three to six months; and 7% percent are expecting a sustained recovery in the next three months. Only 1% said they were experiencing a recovery.

That being said, fewer business owners reported cash flow issues. Over the past 90 days, 52% reported no temporary cash flow issues affecting their ability to pay their bills on time, up from 46% last month. The number of business owners who did report cash flow issues fell to 43% from 50%, the survey said.

Also, 29% of small-business owners plan to increase spending on business development in the next six months, up slightly from the prior month, Discover said. Approximately 40% said they would decrease spending, down from 41%.

To contact the writer of this article, click here: Laurie Kulikowski.

To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski

>To submit a news tip, email: tips@thestreet.com.

RELATED STORIES:



Follow TheStreet.com on Twitter and become a fan on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
DFS $58.39 -0.48%
AAPL $130.28 0.47%
FB $81.53 -1.07%
GOOG $565.06 3.30%
TSLA $218.42 -0.08%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs