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Small Business owners turn sharply pessimistic post-election.

 

PRINCETON, NJ -- U.S. small-business owners are pessimistic post-election, with the Wells Fargo/Gallup Small Business Index plunging to -11 in November from 17 in July. This is the most pessimistic that owners have been about their operating environment since July 2010, when the index stood at -28.

Wells Fargo/Gallup Small Business Index

The quarterly survey was conducted Nov. 12-16, 2012, with a random sample of 607 small-business owners, representing the fourth quarter of 2012. Small-business owners grew increasingly optimistic throughout the first two quarters of 2012, with the index reaching a high of 23 in May. Prior to the beginning of the recession in 2008, index scores were generally higher than 100. The Wells Fargo/Gallup Small Business Index was initiated in August 2003.

Owners' Future Expectations Sink

The Future Expectations Dimension of the index, in which owners rate their expectations for their business over the next 12 months, fell 19 points to -1 in November. Small-business owners' future expectations are at their lowest level since July 2010, when this dimension stood at -2.

Wells Fargo/Gallup Small Business Index Future Expectations Dimension

The decline in small-business owners' future expectations is disproportionately responsible for the plunge in the overall index. Owners' expectations for their financial situation, cash flow, capital spending, and hiring over the next 12 months all worsened significantly in November.

  • One in five small-business owners (21%) expect the number of jobs at their company to decrease over the next 12 months, the highest percentage Gallup has measured to date.
  • One in three owners (34%) expect their company's capital spending to decrease over the next 12 months -- the highest recorded since July 2010.
  • Thirty percent of owners expect "poor" cash flow over the next 12 months -- the highest Gallup has measured to date.
  • Twenty-eight percent of owners expect to be in a "poor" financial position 12 months from now -- the highest Gallup has measured to date.

 

 

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