Wells Fargo: Business Owners Turn Pessimistic Post-Election
Small business owners as a group are now the most pessimistic they have been since Q3/10, according to the latest Wells Fargo/Gallup Small Business Index. The Index fell 28 points to negative 11 (-11) in the post-election survey conducted November 12-16, 2012. Key drivers of this decline include business owner concerns about their future financial situation, cash flow, capital spending and hiring over the next 12 months.
“This is an eye-opening drop in optimism and shows the level of caution that exists among small business owners today,” said Marc Bernstein, head of Small Business for Wells Fargo. “Business owners who navigated through the Great Recession now face more uncharted territory created by ongoing uncertainty in Washington. These owners know that potential federal government spending cuts and tax changes can create a ripple effect, hitting the pocketbooks of consumers and reducing spending that could hit small businesses hard.”
Likely related to owners’ pessimism, one in five small business owners (21%) expects to decrease the number of jobs at their company over the next 12 months – the largest percentage of small businesses expecting to reduce jobs since the inception of the Wells Fargo/Gallup Small Business Index in 2003. One in four owners (26%) reported a reduction in the number of jobs at their company over the past 12 months, representing the largest percentage since the fourth quarter of 2010.
For more Index results, click here.