According to Capital One's third quarter 2012 Small Business Barometer,
small business owners across the country believe economic conditions
have held steady throughout 2012, and looking ahead to 2013, many (45
percent) think the U.S. economy will remain about the same.
Capital One's quarterly survey of small businesses across the nation examines
general economic indicators and small business perceptions of the
economic environment, gauging current financial conditions and business
projections for the next six months.
Of those businesses that expect to
see change, optimism outweighs pessimism by five points, with 29 percent
expecting to see economic conditions improve, compared to 24 percent who
expect conditions to worsen over the next six months. The survey
suggests, however, a growing level of caution about the economy as only
27 percent of the businesses surveyed reported plans to hire in the next
six months, a drop of 10 points in a single quarter.
"Our survey results for the third quarter indicate that while economic
conditions remain stable, and most small business owners report
financials are holding steady, some concerns and uncertainty remain -- and may even be elevating," said Jon Witter, President of Direct,
Consumer and Small Business Banking at Capital One. "A strong close to
the year could shift the dynamic and bring businesses into 2013 with
more momentum, but we do anticipate some regional challenges in the
Northeast as many businesses assess damage from Hurricane Sandy and work
to rebuild. End of the year budgeting and planning is going to be as
important this year as it ever has been."
Financial Performance and Spending
Current economic conditions for small businesses nationally are holding
steady. Nearly half (45 percent) of small businesses report economic
conditions for their business are about the same, consistent with the
previous quarter and the same as the third quarter of 2011. However,
roughly a third (29 percent) of small businesses report improving
economic conditions. This is eight points lower than last quarter and
four points lower than the third quarter of 2011. While a majority of
small businesses believe economic conditions are the same or improving,
a quarter of small businesses (24 percent) believe economic conditions
are getting worse.
Although 40 percent of small businesses report their firm's financial
position has improved compared to a year ago, the number who report
their business is doing worse reached a two-year high (23 percent). This
is an eight point increase from the previous quarter and the third
quarter of 2011. Thirty-five percent of small businesses report their
firms' financial positions are about the same, a six point decrease from
last quarter and a 14 point decrease from the third quarter of 2011.
Economic Outlook and Business Pressures
Small business owners' economic outlook for the next six months has
worsened compared to a year ago. The national business outlook is a
measure of business prospects over the next six months on a scale of
significantly worse (1) to significantly better (10). Even though they
are faced with steady current economic conditions, due to worsening
financial performance, small businesses rate the national business
outlook at 5.7 out of 10 points, 0.3 points lower than the 6.0 from the
