2 in 3 Small Business Owners Rate Economy as Poor; 3 in 4 See It
Getting Worse
POLL: Majority of Small Business Owners Disagree with Wall Street
Bailout
Only 16 percent Believe $700 Billion Package Approved by Congress
Will Help Them
RIVERWOODS, Ill.--(BUSINESS WIRE)--Oct. 27, 2008--The Discover(R)
Small Business Watch(SM) dropped for the second straight month as news
of a congressional rescue plan failed to lift the spirits or
expectations of the nation's 22 million small business owners. The
index slipped 3.2 points in October to 71.4, the lowest confidence
rating since the Watch was established in August 2006.
"Faced with a barrage of bad news about financial markets and the
economy, small business owners continue to tell us that there is no
end in sight to this economic crisis. For the first time, we saw more
than 60 percent rate the economy as poor," said Ryan Scully, director
of Discover's business credit card. "Most of their plans to invest in
their businesses have been on hold for some time."
October Key Findings:
- 64 percent rate the economy as poor, up from 57 percent in
September and the highest rating in this category in the
history of the Watch; 8 percent rate the economy excellent or
good.
- 53 percent believe economic conditions for their businesses
are getting worse, up from 51 percent in September and
equaling the all-time high in the history of the Watch
- The number of small business owners who think the U.S. economy
is getting worse rose one point to 74 percent in October; 9
percent feel the economy is getting better, up slightly from
last month's record low 7 percent.
- 38 percent of small business owners say they have experienced
cash flow issues over the last 90 days, down from 42 percent
in September.
- 23 percent plan to increase spending on business development
over the next six months, down from 28 percent in September
and equaling an all-time low in the Watch; 42 percent plan to
decrease spending compared to 44 percent last month; and 33
percent anticipate making no changes, up from 26 percent in
September.
Economic Crisis: More than Half of Small Business Owners Disagree
with Bailout
Fifty-seven percent of small business owners say they disagree
with the $700 billion economic rescue plan that was approved by the
Congress and signed by the president earlier this month.
"As we have seen in previous Watch surveys, events on Wall Street
do not necessarily reflect the reality for small businesses. That may
be one reason so many don't see this rescue plan as bringing much
benefit to their business," Scully said. "They seem to have little
faith that the government knows how to answer the needs of America's
small business owners."
Other Economy Poll Highlights:
- 69 percent of small business owners are not confident that the
federal government and Congress can address their business
needs.
- When asked how the rescue package may affect their business,
53 percent said they do not expect it will have any impact.
Only 16 percent think the package will help their business,
while 18 percent believe it will hurt.
- 56 percent of small business owners say that they do not
believe that government action can help the economy enough to
benefit their business.
- 77 percent say that economic conditions have not forced them
to borrow money to pay their bills. Among those who are
seeking loans, 70 percent say it is harder to borrow money
right now.
"Small business owners are showing resiliency," Scully said. "Most
are not borrowing, but they are taking a hit on their income: 55
percent are taking home less money this month."
Election Poll: Small Business Owners Not Getting Heard; Economy
Remains Top Concern
Small business owners continue to believe their issues are not
being addressed in the presidential election. Only 19 percent think
that this election season has created a forum for them to heard by the
candidates.
As it has throughout this election year, the economy remains the
biggest issue for small business owners. In all, 47 percent cited the
economy as their No. 1 election concern, down slightly from 52 percent
in September. The issue of government ethics and corruption rose to 15
percent in October, up from 9 percent in September; followed by
national security at 11 percent; the war in Iraq at 10 percent;
healthcare at 6 percent; and immigration at 3 percent.
The views and opinions expressed by small business owners and
consumers who participate in the Small Business Watch survey are their
own and do not necessarily reflect those of Discover Financial
Services or its affiliates.
About the Small Business Watch
The Discover Small Business Watch is a monthly index measuring the
relative economic confidence of U.S. small business owners who employ
less than five employees, a segment that consists of 22 million
businesses producing more than a trillion dollars in annual receipts.
The Watch is based on a national random survey of 1,000 small business
owners. It is commissioned by the Discover Business Card, which
strives to offer the best business credit card for American small
businesses, and is conducted by Rasmussen Reports, LLC
(www.rasmussenreports.com), an independent survey research firm. The
numeric index is calculated by assigning values to responses to a set
of six consistent questions. The base value of the Watch was
established at 100.0 based on surveys conducted in August of 2006. In
addition to generating the index, the Small Business Watch surveys
small business viewpoints on key business drivers, and also surveys
4,000 consumers to gauge purchasing behavior and attitudes towards
small businesses. For past results and small business survey data,
visit www.discovercard.com/business/watch. For information on Discover
Business Card, visit www.discovercard.com/business.
About Discover Financial Services
Discover Financial Services (NYSE: DFS) is a leading credit card
issuer and electronic payment services company with one of the most
recognized brands in U.S. financial services. The company operates the
Discover Card, America's cash rewards pioneer. Since its inception in
1986, the company has become one of the largest card issuers in the
United States. Its payments businesses consist of the Discover
Network, with millions of merchant and cash access locations; PULSE,
one of the nation's leading ATM/debit networks; and Diners Club
International, a global payments network with acceptance in 185
countries and territories. For more information, visit
www.discoverfinancial.com.
CONTACT: Discover Financial Services
Jon Drummond
224-405-1888
jondrummond@discover.com
or
Robinson Lerer & Montgomery
Daniel Delson
646-805-2036
dmd@rlmnet.com
SOURCE: Discover Financial Services