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Small Business Watch
November 2008
Economic Confidence Continues to Fall as Cash Flow and Business Investment Issues Intensify
The Discover Small Business Watch continued to decline for the third straight month, dropping below 70.0 for the first time since the Watch was established in August 2006. The index fell 3.9 points in November to 67.5.
November Highlights :
- 44 percent of small business owners have experienced cash flow issues over the last 90 days, up sharply from 38 percent in October. This is the category’s highest rating since April 2008, when the same number of owners reported cash flow issues.
- Cash flow difficulties were most pronounced for small business owners whose primary customers are consumers: 49 percent said they had cash flow issues in the past 90 days that caused them to hold off on paying some bills, while only 33 percent of owners who sell business-to-business expressed the same issue.
- 51 percent plan to decrease spending on business development over the next six months, up significantly from 42 percent in October and a record-high for this category; 20 percent plan to increase spending, down slightly from 23 percent last month; and 24 percent are not planning any changes in the next six months.
- 65 percent rate the economy as poor, up 1 percent from October; only 5 percent rate the economy excellent or good, the lowest rating in this category in the history of the Watch.
- 54 percent believe economic conditions for their businesses are worsening, up from 53 percent in October; and only 15 percent feel conditions for their business are improving, which is another record low.
- The number of small business owners who think the U.S. economy is getting worse decreased by two percentage points to 72 percent in November; 8 percent feel the economy is getting better and 14 percent think it is staying the same.
