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Gallup: Small-Business Optimism Drops From Record High

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By    |   Tuesday, 12 February 2019 06:35 AM

U.S. small-business owners are less optimistic about business conditions now than they have been over the past year.

The Wells Fargo/Gallup Small Business Index, which measures small-business owners' attitudes about a wide variety of factors affecting their businesses, is down to +106 in Quarter 1, 2019, from the record high of +129 set in Quarter 4, 2018.

The current drop erases the gains in confidence seen in the last two quarters of 2018 and returns the index to where it was from Quarter 3, 2017, through Quarter 2, 2018.

The current survey of small-business owners was completed Jan. 9-15, 2019 -- during the partial government shutdown. This quarter's decline was fueled by a drop in items related to small-business owners' optimism about their current financial situation, as well as a drop in their overall future expectations.

Additionally:

  • 45% of owners reported that their revenues increased "a lot" or "a little," down significantly from 55% last quarter.
  • Fewer owners now (55%) than in the previous quarter (62%) expect their revenue to increase "a lot" or "a little" in the coming months.
  • Owners also became more negative when assessing their current cash flow -- with 66% saying it is "very" or "somewhat" good compared with 74% last quarter.

Meanwhile, another new survey found that the recent partial government shutdown hurt more than a third of small-business owners.

The SurveyMonkey poll for CNBC found 37 percent of 2,200 small business owners saying the 35-day shutdown that began Dec. 22 hurt their bottom lines.

In other findings, the survey showed:

  • 35 percent reported a decline in sales during that period, the survey found.
  • 13 percent said they lost a contract with a federal agency during the shutdown.
  • 10 percent said they lost access to loans from the Small Business Administration.
  • 20 percent said they had "major" concerns about another shutdown, while 53 percent said a recession was "very" or "somewhat likely."

Roughly 800,000 federal workers will be furloughed or required to work without pay if another shutdown begins Saturday, The Hill reported.

Many of those employees have not yet received the back pay owed for the most recent closure, and it is unclear if contractors will get any compensation for lost work, The Hill reported.

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U.S. small-business owners are less optimistic about business conditions now than they have been over the past year.
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2019-35-12
Tuesday, 12 February 2019 06:35 AM
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