Small business owners economic confidence leveled off in June, halting a two-month rise, according to a new survey.
The Discover Small Business Watch index dipped to 86.1 in June from 87.4 in May as rising concerns over temporary cash flow issues offset some improvement in the way small business owners see the climate for their own operations.
Small business owners reporting temporary cash flow issues jumped to 51 percent in June, up from 45 percent in May and the highest since January. Forty-five percent of owners reported no cash flow issues, down from 48 percent in May; and 4 percent were unsure.
The Watch recorded a slight increase in confidence about how individual business owners were faring: 30 percent say economic conditions for their businesses are improving, up from 28 percent in May; 43 percent said conditions are getting worse in June, down from 44 percent in May; and 34 percent said things are staying the same, up from 24 percent in May.
Many small business owners are working harder than ever to make payroll, pay their bills and keep their businesses running, said Ryan Scully, director of Discovers business credit card, in a statement. Last month, more owners reported increasing their spending, which is good news. However, if sales are lagging this month, its possible that cash flow was more of an issue.
In June, 29 percent of small business owners said they believe the overall economy is getting better, falling from 35 percent in May; 51 percent say the economy is getting worse, steady from the previous month; and 16 percent see the economy as the same, up from 12 percent in May.
While the number of small businesses rating the economy as poor fell to 51 percent from 56 percent in May, the percentage rating the economy good or excellent held steady at 12 percent. Thirty-seven percent rated the economy fair, up from 32 percent in May.
Forty-three percent of small business owners said they plan to decrease spending on business development activities such as advertising, inventories, and capital expenditures, down from 46 percent in May; 25 percent planned to increase spending, no change from May; and 29 percent are planning no changes in spending on development, up from 25 percent in May.
When asked to rate separately the impact on their businesses of the performance of the U.S. stock market, the oil spill in the Gulf of Mexico and the European debt crisis, 51 percent of small business owners said the stock market was having some negative impact on their businesses, while 37 percent said it had no impact at all, and 10 percent felt some positive effect.
Thirty percent said the gulf oil spill has had some negative effect, while 63 percent said it had no impact at all, and 4 percent indicated that it has had some positive effect.
Forty percent have felt some negative impact from the debt crisis in Europe, while 51 percent said it had no effect, and 6 percent said they have experienced some positive effects.
