Small-business owners across the country believe economic conditions have held steady throughout 2012, and looking ahead to 2013, nearly half (45 percent) think the U.S. economy will remain about the same, according to Capital One's third-quarter 2012 Small-Business Barometer.
Survey results also suggest, however, a growing level of caution about the economy, as only 27 percent of the businesses surveyed reported plans to hire in the next six months, a drop of 10 points in a single quarter. Of those businesses that expect to see change, optimism outweighs pessimism by 5 points, with 29 percent expecting to see economic conditions improve, compared with 24 percent who expect conditions to worsen over the next six months.
Even though they are faced with steady current economic conditions, due to worsening financial performance, small businesses rate the national business outlook at 5.7 out of 10 points, 0.3 points lower than the 6.0 from the previous quarter, indicating small-business owners' economic outlook for the next six months has worsened from a year ago.
Across the country, fewer small businesses are planning to hire employees in the next six months, with the majority (69 percent) of small businesses saying they do not plan to hire employees in the next six months--4 points higher than the same time last year (the third quarter of 2011) and 9 points higher than the second quarter of 2012.
However, the percentage of businesses reporting challenges in finding the right talent to fill available openings has decreased slightly from the second quarter; 14 percent of small businesses say they have job openings they are unable to fill, down 2 points from the previous quarter.
On the spending side, business development and investment are steady, with nearly two-thirds (65 percent) of small businesses planning to keep spending at the same levels, a 6-point increase from the third quarter of 2011, but a 5-point decrease from last quarter's two-year high of 69 percent.
"Our survey results for the third quarter indicate that while economic conditions remain stable, and most small-business owners report financials are holding steady, some concerns and uncertainty remain--and may even be elevating," Jon Witter, president of direct, consumer and small business banking at Capital One, said in a statement. "A strong close to the year could shift the dynamic and bring businesses into 2013 with more momentum, but we do anticipate some regional challenges in the Northeast as many businesses assess damage from Hurricane Sandy and work to rebuild. End-of-the-year budgeting and planning is going to be as important this year as it ever has been."
Capital One's quarterly survey of small businesses across the nation examines general economic indicators and small-business perceptions of the economic environment, gauging current financial conditions and business projections for the next six months. The survey was sponsored by APCO Worldwide of Washington, D.C. Braun Research completed 1,901 interviews with owners or managers of U.S. for-profit small businesses, defined as those under $10 million in annual revenue.