The strength of the U.S. economic recovery will rest on how well small and midsized businesses fare, according to a new report.
The report, by TD Economics and TD Bank economist James Marple, outlines the characteristics of the recent recession that have been particularly hard on small businesses, namely acute job losses, the tightening of the credit markets, and the industrial composition of the economic correction. It also contends that small and medium-sized businesses are at the forefront of the creative process of powering the economy out of the downturn.
Marple, who specializes in the factors impacting the U.S. economy, writes, "The Great Recession was not kind to small businesses in America. Small and medium-sized businesses suffered a disproportionate share of the job losses and many still have difficulty accessing credit from some lenders. Fortunately, things are beginning to look up."
In the report, Marple also emphasizes the reality that "economic growth over the longer-term is driven primarily by individuals taking risks and making sacrifices in order to bring innovative ideas to market." If this growth is set in motion, he estimates that by the end of 2011, the U.S. economy could employ over 6 million more people than it does today.
Data cited in the report indicates that a broader economic recovery is already starting to take shape, which may be sooner than many small businesses anticipated. According to a January 2010 survey of small business conducted by TD Bank, a mere 21 percent of small business owners believed that relief from the recession would arrive by mid-year. Still, 87 percent of small business owners said they were optimistic that their business would perform at least the same or better in 2010 compared with 2009, and 36 percent expected to see their business grow this year.
For a copy of the report, visit www.td.com/economics/us.jsp.
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