Small Business Owners’ Optimism Drops -- Gallup

The latest Gallup quarterly poll of small business owners shows that optimism has dropped to an index reading of 17 in July, down from 23 in April. A reading above zero indicates optimism. The Wells Fargo/Gallup Small Business Index hit a low of -28 in mid-2010.

Small business owners rate their future expectations at 18, down from 24 in April and 21 in January, the lowest level yet for 2012. Business owners expecting their financial situation to be very good or good over the next 12 months declined to 59% from 66% in April. The percentage expecting a revenue increase also fell, from 49% in April to 43% in July.

When asked about current operating conditions, the index reading remained essentially neutral at -1.

The feeling among business owners is much the same as the Gallup index we noted earlier today on consumers’ levels of economic confidence. Gallups sums it up:

Small-business-owner optimism is essential to U.S. economic growth and job creation. But it is hard to see how owners can become significantly more optimistic until jobs conditions improve substantially, consumers begin to exhibit sustained, increased economic confidence, and consumer spending increases.

Paul Ausick