Sacramento Business Journal - The optimism level among owners of small businesses continues on a five-quarter decline, according to latest results of a quarterly Wells Fargo/Gallup Small Business Index reported Tuesday.
The index score dropped to 48, the lowest level reported since the survey's inception in August 2003, when the score was 69. The most recent results represent a 35-point drop from the previous survey in January, and a 66-point drop from the index's highest score of 114 in December 2006.
The 35-point drop is the index's largest quarterly decrease. The index score is the sum of both current and future expectations of small-business owners for six key measures: financial situation, cash flow, revenues, capital allocation, job hiring, and credit availability.
Small-business owners' future expectations for the next 12 months fell sharply to 30, a 15-point drop from the previous quarter. Ratings of their current situation dropped 20 points from January to 18. While each of the six key measures in the index continued to reflect a drop from the previous quarter, the most significant changes were found in present revenue situation and future expectations for cash flow and financial situation.
"The nearly 50 percent drop in the index clearly reflects the intensified financial pressures small business owners have felt over the last three months," said Scott Anderson, Wells Fargo senior economist.
Despite the drop in overall optimism, survey respondents said they feel satisfied being small-business owners. Satisfaction levels were relatively unchanged in April from January -- down only four points to 86 percent. Additionally, 94 percent of respondents said they feel successful being a small-business owner, virtually unchanged from all prior quarters.
Small-Business Owner Optimism Continues to Decline
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