Small Business Optimism Plummets -- Gallup

The Wells Fargo/Gallup small business index dropped from a July reading of 17 to a November score of -11, Gallup reported this morning. The index surveys small business owners’ ratings of current conditions for their businesses and their expectations for the next 12 months.

The index climbed to a high of of 23 in April 2012 but Gallup notes that prior to 2008, readings typically topped 100.

While owners’ view of current conditions fell 9 points, to -10, which suggests that business owners have become slightly pessimistic. The bigger change came in expectations, which fell from 18 in July to -1 in November. Gallup noted that 21% of small business owners expect job numbers to decrease, and one in three business owners expects capital spending to drop in the next 12 months.

Gallup summed up the latest survey:

Overall, the Wells Fargo/Gallup Small Business Index survey results suggest the U.S. economy is extremely fragile — and possibly susceptible to another recession. Policymakers need to keep this acute fragility in mind as Washington struggles to avert the “fiscal cliff.”

Paul Ausick