For months now, all the economic indicators in the country have been slowly, slowly coming to life. Unemployment goes down, business lending volume rises, consumer and business confidence are better than they have been in years, and so on. I’ve had a smile pasted to my face for months now.
Unfortunately, even as lending volume rises to small businesses, small business confidence is dropping. This was something we reported regularly throughout 2011, but in 2012 the outlook seemed rosier. Why, in the hottest months of the year and with comparatively little dour economic news, has confidence fallen now?
There’s no one, easy answer, but the 3 percentage point drop in confidence stems from an uneasy sense that the economy isn’t going where it should. While unemployment has been falling, it remains high, and several economic indicators either haven’t taken off in the way everyone would like to imagine they should be or the usual election-year doom and gloom is taking a toll. When you add it all up, it’s little wonder that small businesses are feeling less confident than usual.
How to fight that? The economy needs to keep improving, obviously. Unemployment needs to continue to fall. I do think that better communication from financing companies and banks would go a long way, because there’s plenty of financing out there for small businesses who need it. It’s just that by and large, that hasn’t been conveyed to the small business owners who, you know, really need it.
As always, we preach patience, but it’s difficult. How optimistic are you feeling right now?
Photo credit to iStock