Although 40 percent of small businesses report their firm’s financial position has improved compared to a year ago, the number who report their business is doing worse reached a two-year high (23 percent). This is an eight point increase from the previous quarter and the third quarter of 2011. Thirty-five percent of small businesses report their firms’ financial positions are about the same, a six point decrease from last quarter and a 14 point decrease from the third quarter of 2011.
Economic Outlook and Business Pressures
Small business owners’ economic outlook for the next six months has worsened compared to a year ago. The national business outlook is a measure of business prospects over the next six months on a scale of significantly worse (1) to significantly better (10). Even though they are faced with steady current economic conditions, due to worsening financial performance, small businesses rate the national business outlook at 5.7 out of 10 points, 0.3 points lower than the 6.0 from the previous quarter. Conversely, all of the key business indicators are having a greater impact on business prospects than last quarter. Price margins are expected to have the most impact on business prospects, also having the largest change since last quarter (0.3-point decrease).
Hiring & Spending OutlookAcross the country, fewer small businesses are planning to hire employees in the next six months. The majority of small businesses say they do not plan to hire employees in the next six months (69 percent). This is four points higher than the same time last year (Q3 2011) and nine points higher than last quarter (Q2 2012). Businesses reporting challenges in finding the right talent to fill available openings has decreased slightly from Q2. Fourteen percent of small businesses say they have job openings they are unable to fill, down two points from the previous quarter.