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Small Business No Longer Plagued By Recession Pessimism

Small Business No Longer Plagued By Recession Pessimism

According to a recent survey, small business pessimism is at its lowest level since the recession.   Optimism is up regarding not only their own companies, but also the economy in general.  Although still not back to pre-recession levels, this trend of positive thinking seems to be headed in the right direction.  But, does it mean that the environment for small business is actually improving? Small business lending by most banks is still tight.  Many small to mid-sized firms have turned to community banks or other alternative sources of commercial financing to stay afloat or to accelerate growth post-recession.


Source: Small Business Trends, April 30 2012, by Scott Shane  

According to the spring 2012 release of the twice-a-year PNC Economic Outlook Survey, small business owners are no longer as pessimistic about the economy as they were during the economic downturn and the early part of the recovery. However, they aren’t exactly back to their pre-recession optimism either.

The nationally representative survey of approximately 500 business owners and managers of companies with sales of between $100,000 and $250 million per year shows that the net percentage of respondents who were pessimistic (percentage pessimistic minus percentage optimistic) about the local economy was 22 percent in the spring of 2012.

This was the lowest level since the fall of 2007, when the net percentage pessimistic was 1 percent. But back in the fall of 2004, 9 percent of small and medium sized business owners were more optimistic about their local economy than pessimistic about it.

A similar pattern can be seen in the business owners’ optimism about their own companies. A net 11 percent were optimistic this spring, the most positive level since the fall of 2007. But again, these numbers are low in comparison to before the recession. In the spring of 2007, for instance, a net 30 percent of respondents were optimistic.

Moreover, decision makers at small and medium-sized businesses remain profoundly pessimistic about the national economy. A net 38 percent were pessimistic about that in the spring of 2012. In comparison to the net 15 percent who were optimistic in the fall of 2004, that’s not very positive at all.

Then again it’s not the horrific net 69 percent pessimistic about the national economy recorded in the spring of 2009.