Discover: Small Business Confidence Jumps

More small business owners surveyed this month have increased expectations that conditions for them will improve in the next six months, according to Discover’s Small Business Watch.

More of them are also planning to increase spending, with 25 percent saying they will spend more on advertising, inventories and capital expenditures. This figure is up from 18 percent in December. There was also a jump in this category in the December-November time frame.

Overall confidence is high, with the Small Business Watch index jumping to 85.5 from 77.0 in December, Discover reported.

“We measure small business insights and expectations about the larger  economy as well as on the local level, so it’s good to see confidence rise on Main Street,” said Ryan Scully, director of Discover’s business credit card.
“Januaryshowed us the first month-to-month increase since August in the number of small business owners who plan to increase spending on business development. Self-investment is a healthy sign in the small business economy.”

Out of 750 small business owners surveyed, 29 percent said they see conditions for their own businesses getting better in the next six months, up from 22 percent in December and 19 percent in November, Discover said.

The number of small business owners who see the economy improving rose to 31 percent in January, up from 25 percent last month. Forty-six percent see the economy getting worse, down from 49 percent in December. 

The survey also included questions on health care reform.

Eighty-one percent of small business owners say they do not offer health insurance to their employees. That figure is down from 85 percent in January 2009, but still above the 77 percent in January 2008 and 74 percent in January 2007.

“Among owners who offer health insurance, 29 percent have considered discontinuing it because of the cost,” Discover reported.

“Health care continues to be a concern for most small business owners as they try to balance cost with other business obligations,” Scully said. “In terms of relief from the pending health insurance reform legislation, they aren’t holding their collective breath for anything to change soon.”

The Discover Small Business Watch is a monthly index measuring the “relative economic confidence” of U.S. small business owners who have less than five employees, a segment that Discover says consists of 22 million businesses producing more than a trillion dollars in sales.