Plans for increased spending by small businesses hit 4-year high
Gas prices are rising. The economy is still shaky. But since the recession began, there hasn’t been a higher percentage of the nation’s nearly 6 million small businesses expecting to boost their spending.
A survey from pollster Gallup and Wells Fargo found that 28% of such business owners plan to increase capital expenditures in the next 12 months -- the most since mid-2008. It’s also been four years since so few business owners -- 23% -- said they plan to scale back spending.
Small Main Street companies were hit hard by the recession but have since largely recovered their optimism. More employers plan to hire new workers than at any point since the economic downturn. The head of the Small Business Administration recently landed a regular seat at President Obama’s Cabinet meetings.
Though businesses that say they’ve cut spending in the past year still outweigh those who shelled out funds, recent expenditures are at a post-recession peak. And companies are increasingly optimistic about getting credit, with more than a quarter saying it shouldn’t be too much of a problem -- though many major banks are still hesitant to lend.
But the near future -- with soaring prices at the pump scaring off consumers -- could herald another retrenchment, according to Gallup.
And farther out, a separate report from Fidelity Investments found that more than half of small business owners may not have strong retirement plans. Those who were asked about details of their current plans could correctly identify only two-thirds of the available features.
“Whether these increased capital spending expectations are going to be realized remains in doubt in today’s fragile economy,” Gallup researchers wrote. “Even today’s increased optimism among small business owners leaves their economic perceptions far behind pre-2008 levels.”
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