Report: Small Business Confidence Rebounds in July
Monday, July 28, 2008
After sinking to its lowest level in June, economic confidence among small business owners rebounded in July, as the number of those who said they are experiencing cash flow issues decreased significantly and general economic confidence began trending upward.
The Discover Small Business Watch jumped in July to 84.6, up 12.8 points from 71.8 in June.
"Based on the results we've seen over the past six months, cash flow is one of the key indicators that affects small business owners' confidence in the economy," said Ryan Scully, director of Discover's business credit card. "Given the substantial decrease in cash flow concerns that were reported this month, it's not surprising that economic confidence also rebounded with a double-digit increase."
July Key Findings:
The Discover Small Business Watch also regularly tracks trends in how small businesses are using credit with their customers and the rate of delinquencies they are seeing. This month, 27% of owners said they extend credit to their customers and 70% of this group indicated that their customers have delayed a payment or asked to delay a payment in the past three months. Slightly more small business owners - 32% - were extending credit to customers in April 2008; however delayed payments and requests for extensions that month were higher, at 73%. In September 2007, 30% of small business owners were extending credit to their customers and 64% received delayed payments or requests to delay payments.
"As shifts in the housing and credit markets continue to impact consumers' spending habits, small business commerce will likely experience a slowdown as a result," said Scully. "The good news is that even though small business owners are seeing customers delaying their credit payments, it doesn't appear to be having a negative impact on their cash flow."
Click here to view the results of the Discover Small Business Watch survey for July in their entirety.