Small-Business Optimism Declines, Spending on Smartphones Rises
As optimism declines, small-business capital expenditure patterns are changing, with a focus on tablets and smartphones.Small-business owners concerned about their future financial position caused the Wells Fargo/Gallup Small-Business Index to decline six points to positive 17 in a survey conducted in July, erasing gains made earlier this year. However, business-owner optimism has improved significantly from a low point in the third quarter of 2010, the report noted. Future capital spending was driven by investment in equipment and machinery (64 percent) as well as technology, such as computers (61 percent), new software or Websites (56 percent) and mobile devices (52 percent). Investment in smartphones stood at 38 percent in the second quarter of this year, up 11 points from the same quarter last yer; purchase rates for cell phones that are not smartphones, fell 4 percent in this interval. Investment in tablets like Apples iPad rose 12 points to 23 percent, while spending on desktops declined 3 percentage points to 29 percent.
Business owners have a lot of unknowns in front of them today, Doug Case, Wells Fargo small-business segment manager, said in a press statement. This is the first drop in the index this year, and it seems to correlate to the lower percentage of business owners planning to invest in their companies in the year ahead. In the survey, businesses said theyll be more likely to invest in their businesses when they see improvements in their operating environment, and better sales and revenue.