Discover Small Business Watch Index Falls Further in January
After a brief rebound in December, economic confidence among small business owners dipped in January as fewer owners plan to increase spending for business development. The Discover Small Business Watch index fell to 71.4 in January, down 1.4 points from December.
"Although small business owners expressed a little more optimism at the end of 2008, most remain cautious and concerned as we begin a new year," said Ryan Scully, director of Discover's business credit card. "As a result, we are seeing more owners hang onto their cash and put business development spending plans on hold for now."
Only 19 percent of owners say they plan to increase spending on business development over the next six months, the lowest number for this category in the Watch's 30-month history. Forty-six percent say they plan to reduce spending on business development and 30 percent are not making any changes.
Another factor in this month's decline in optimism is a decrease in the number of small business owners who see economic conditions for their businesses improving. Seventeen percent of small business owners believe that economic conditions for their businesses are getting better, down from 21 percent in December. Those who feel conditions are getting worse is unchanged at 51 percent, while 25 percent feel conditions remain the same, up slightly from 23 percent last month.
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