NEW YORK (MainStreet) – These days, economic progress isn’t measured with a yardstick – it’s measured with a microscope.

But any progress, even incremental, is welcome news. That’s the stance Capital One (Stock Quote: COF) is taking with its most recent Small Business Barometer survey for the second quarter of 2011.

The general consensus is that small business owners see the economy getting better, if at a glacial pace. That’s an important piece of news, given the importance of small businesses to the U.S. economy. While studies vary, the U.S Small Business Administration has said that small companies account for 50% of U.S. GDP.

According to the Capital One survey, areas of confidence among business owners include hiring and credit and investment  - two key drivers of the economy going forward.

“Our second quarter survey results suggest that many small businesses are seeing sustained improvement in business performance,” notes Peter Appello, executive vice president of small business banking at Capital One Bank. “This is a trend we’ve seen developing over the last few quarters and, while the pace has been modest, it has been generally consistent and that’s definitely something we like to see.”

Appello acknowledges that the growth rates linked to small companies are modest, but as the saying goes – any port in a storm.

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“While there continues to be a level of caution as businesses think about expenditures, we are seeing a small but healthy uptick this quarter in the percentage of small businesses planning to hire and increase spending on business development and investments over the next six months,” he adds. “Although most of those businesses planning to hire will keep expansion modest, these results are encouraging for the second half of the year.”

Capital One points to some key trends in the study – trends that seem to indicate that small company owners are coming out of hibernation, lured by looser bank lending practices, and a sense that the economy has hit bottom – and can only move up.

  • 35% of the small businesses surveyed say they will add staff during the next six months. That’s up 6% from Q1, and the highest “confidence” rate since the first quarter of 2010, Capital One says.
  • 78% of business owners say they will hire between one and 10 new employees and 11% say they will hire 10-20 new staffers in the “near term”.
  • 56% of the small businesses surveyed say they did hire new employees during the past six months, but only minimally. Just 14% hired more than 10 employees during that time period.
  • 8% of survey respondents expressed concerns about credit access as a major consideration in bringing new employees on board. That’s a good sign that small businesses are finding it easier to get credit from banks and lenders.

Perhaps the biggest takeaway from the Capital One survey is what it says about the big picture: 44% of small business owners say that the economic picture is brightening– that’s up 12% on a year-to-year basis. Another 48% said their financial picture looks better than it did one year ago, while 85% say that it’s easier to get financing right now.

It’s not a ringing endorsement of the economy by any means. But the Capital One survey does reveal that, for the first time in a long while, small business owners are inching closer to a brighter economic future – for them, their employees and the economy in general.

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