Job Creation Tops List of Small Businesses Challenges: Report

Small business owners want politicians to focus on unemployment and job creation as key initiatives, a survey finds.

Despite the recent economic turbulence and a survey that shows 61 percent of small business owners aren't optimistic about the economic outlook, new data shows a 27 percent increase in new business activity in the second quarter of 2011 versus the same quarter last year. The findings are part of the first Manta SMB Wellness Index, a quarterly index on the state of small business released by Manta, an online community dedicated to small business.

The index shows business activity is surging in many parts of the country. California tops the list as the state with the most activity in the second quarter of this year, and Maine saw the biggest growth year-over-year. The survey found businesses focused on extending the life of existing products are on the rise and repair businesses have seen an increase year-over-year. In addition, there's momentum in the e-commerce/IT outsourcing category, and the electronics industry has also seen a lift in activity compared to Q2 2010.

"Despite the challenging economic conditions, small business owners are charging ahead; in fact, our survey found 37 percent of small business owners expect their profits will increase this year," said Pamela Springer, president and CEO of Manta. "As a company focused on helping the small business community, Manta sees the entrepreneurial spirit is very much alive and well."

California, Florida and Texas had the biggest boost in businesses activity in Q2, while Maine, Colorado and Arizona saw the most gains year-over-year. Bangor, Maine, and Portland, Maine, were the cities with the biggest increase in activity compared to Q2 2010. Oregon, Utah and New Hampshire had the sharpest declines in activity year over year, while Portland, Oregon, and Houston were the cities with the lowest growth in business activity compared to Q2 2010.

As the small business community begins to expand again, Manta's survey found that more than one third of small business owners (38 percent) want politicians to focus on unemployment and job creation as key initiatives. However, in a separate survey, an overwhelming majority of small business owners polled (68 percent) say President Obama's recent jobs proposal doesn't impact their plans to add employees -- and they still don't intend to hire.

The survey found two-thirds of those polled (63 percent) felt the Obama administration has hurt small business, but when asked which political party best supports them, 35 percent say "none of them." Although small business owners favor conservative parties two-to-one, 23 percent believe the Republican party best supports them and 17 percent feel the Tea Party has their back. Twenty-one percent feel the Democratic party is the political party they feel best supports small business.

Manta's survey also revealed a majority of small business owners (67 percent) say they're highly unsatisfied with the effectiveness of government. The index examines nationwide data collected from multiple business resources and takes a "pulse" of small business owners on hot topics. Manta's latest survey polled more than 2,300 small business owners about their feelings on the political environment and its impact on the SMB community.