According to a Gallup poll, American small-business owners became extremely pessimistic about their future prospects following the presidential election. After hitting a nadir in mid-2010, optimism had been growing steadily over the past two years. But in the last month, that positive trend has reversed.
A deeper look at the Gallup data reveals even more bad news:
- One in five small-business owners (21%) expect the number of jobs at their company to decrease over the next 12 months, the highest percentage Gallup has measured to date.
- One in three owners (34%) expect their company’s capital spending to decrease over the next 12 months — the highest recorded since July 2010.
- Thirty percent of owners expect “poor” cash flow over the next 12 months — the highest Gallup has measured to date.
- Twenty-eight percent of owners expect to be in a “poor” financial position 12 months from now — the highest Gallup has measured to date.
Small business is the sector that is most important for the development of the American economy. Short term, it’s where the jobs come from. As America transitions away from the late-stage manufacturing economy of the past toward an information-based economy in the future, it is going to be startups and small businesses that pioneer the new terrain.
Unfortunately, these are the sectors that have the most to worry about from a number of the policy proposals of the returning Obama administration. If the people we’re counting on to jumpstart the recovery are pessimistic about their future business prospects, that is a big problem. Let’s hope the White House figures this out and gets to work to fix it.