US Small Businesses ‘Nervous’ about the Economy

According to the National Small Business Association’s 2008 Survey of Small and Mid-Sized Business, most small and medium-sized companies in the US believe that the economy looks bleaker than five years ago.

The survey of businesses indicated that 71 per cent of respondents thought that the economy was worse than it was five years ago. This figure was up by a massive 43 per cent from 2007. Half of the small businesses that participated in the survey also admitted that they had encountered some difficulty in securing credit during the last year due to the impact of the global credit crunch. In addition to this, nearly half of the respondents stated that they expected a recession to occur in the next year.

The number of survey respondents who said that they would seek bank loans for financing fell to just 28 per cent this year, which is the lowest figure since the annual survey began fifteen years ago. This notable decline in people seeking loans shows a real lack of confidence in the US banking industry.

Small businesses are important to the US; they are often described as the backbone of the country’s economy. Prior to the publication of their survey results, the National Small Business Association (NSBA) had already voiced concerns to their members that the current US housing crisis could lead to a recession.

Todd McCracken, president of the NSBA, concluded the results of his association’s survey in a statement. He said: “Our survey shows plain and clear how the economic slowdown is affecting small business. This year, a whopping 71 per cent (of respondents) have a negative outlook on the economy - clearly small business is feeling the pinch.”

These fears over the impact of the economy on US small businesses will undoubtedly spread to the UK soon. This means that if you’re a small business and you’re worrying about the impact of the global credit crunch, you should prepare yourself now. You can do this by ensuring that your small business has an effective website, which is a cost-effective way to help you to generate sales leads online. You could also boost the activity of your small business website by investing in some online advertising such as a Google Pay Per Click (PPC) campaign.

Source:

Reuters