Wed, August 04, 2010
Small Business Owners Expect Recession to Continue into 2011
Owners of small businesses are upbeat about their own chances for success, yet most believe that we will still be in a recession a year from now.
U.S. Bank recently released the results of its Small Business Annual Survey. The 2010 Survey included results from 2,725 small business owners in 24 states stretching from Ohio to the west coast. 90% of those surveyed believe that the country is still in a recession and three-quarters expect that our economy will still be in a recession a year from now.
About half of the businesses surveyed have experienced 2010 revenues that are at least as good as last year’s. Although 55% agreed that this is not a good time to start a business, almost two-thirds considered their own companies’ prospects for success to be strong.
Most of those surveyed felt that economic conditions in their own state were worse than those of the nation as a whole. This was particularly true in California, where two-thirds rated the state’s economic condition as below-average.
Closer to home, the MassBenchmarks Current Economic Index for the second quarter of 2010 indicated that the Bay State’s economy grew at an annualized rate of 6.4 percent vs. a national expansion rate of 2.4 % in the same period.
Despite this healthy rate of growth, those following the Massachusetts economy are cautious about expectations for the future. Government stimulus spending is believed to have played a significant part in the state’s growth in the last year, and economists doubt that private-sector spending will be adequate to take up the slack as the stimulus funds go away. Moreover, economic growth slowed at the end of the second quarter and the state’s unemployment rate continues to hover around 9%.