Small business confidence dropped sharply on Discover’s national index in August, with 62 percent of owners seeing the economy as worsening and 55 expecting unfavorable conditions for their own business.
Discover’s overall “Small Business Watch” index fell from 83 in July to 73 this month.
Confidence was at a record low among small business owners who sell directly to consumers. Those businesses slid 17.4 points since last month to a record-low 65.5 points on the index, compared to business-to-business operators who marked 79 on the index in August, down only 2.2 points from July.
“There’s growing concern that the economy is stuck in neutral, or even sliding, and small business owners definitely reflected that sentiment this month,” said Ryan Scully, director of Discover’s business card. “With the economy seemingly unable to show sustained growth, and small businesses not expanding to create jobs, it’s no wonder that confidence is down.”
August marks the third straight monthly decline for Discover’s four-year-old index, which is the lowest it has been in 18 months. In July, the Watch reported that 75 percent of small business owners expected a second recession to occur before the country sees a full recovery.
The outlook is also grim on the labor front, with 78 percent of small businesses saying they have no plans to do any hiring. When asked about hiring over the next few months, 72 percent of business owners had no plans to add or subtract jobs; 20 percent said they were laying off workers; and 6 percent planned to do some hiring.
The percentage of small business owners planning layoffs is the lowest in the history of the Watch.
The Discover index is based on a national random survey of 750 small business owners. It is commissioned by Discover Business card.
