Optimism for the future dropped in a new national survey of business owners for the Wells Fargo/Gallup Small Business Index. In Idaho, and the nation as a whole, concerns over the path forward for the economy are causing some business owners to hold off on adding new workers or equipment or expanding operations.
The overall Small Business Index remained positive, but dropped from the second quarter of 2012 to the third quarter.
“All of the drop occurred in the expectations for conditions in the next 12 months,” said Mark Vitner, senior economist with Wells Fargo.
“This recession has made a lasting impact on a lot of small business owners,” he said.
That holds true in Idaho, according to Jim Hogge, the state director of the Idaho Small Business Development Council.
“They’re holding back for more certainty,” Hogge said. Political uncertainty could be somewhat resolved with the November elections, but economic conditions are dependent on the ongoing debt issues in Europe and still-sluggish consumer spending domestically. Hogge said that even business that are currently profitable are holding back at expanding, which wasn’t the case five years ago when similar businesses would add workers.
“They want to hire somebody long term. They don’t want to hire them and lay them off right away,” Hogge said. “A lot of small business owners treat their workers like family.”
The Wells Fargo index, based on surveys conducted July 9 to July 13, was a positive 17 for the second quarter of the year. That’s below the first quarter, but still far above the Recession low point of negative 28 in mid-2010.