Small-business owners see conditions for their businessesgetting worse in the next six months, according to a new survey.

After some upward trends for most of last summer and intothe fall, Discover's monthly check on the pulse of small-business ownersmeasured 75.7 in March, down 9.2 points from February and back to the levels ofa year ago.

"We've seen bigger month-to-month drops, but thereis clearly a pattern here: Small-business owners don't like what they're seeing-- both at home and in the larger economy -- and they're responding by pullingback, rather than just holding the line," said Ryan Scully, director ofDiscover's business credit card, who commissions the monthly survey. "Taxseason could be having an effect on the overall mood, especially becausethey're still not seeing any relief from the government."

The March results were marked by a surge in the number ofsmall-business owners who say economic conditions for their own businesses aredeteriorating: Fifty-three percent of them say the climate will get worse inthe next six months, compared to only 37 percent who answered that way inFebruary. Of the remaining respondents, 20 percent said things are gettingbetter, 20 percent said things are the same, and 6 percent are unsure.

When asked about their intentions to invest in theirbusinesses, 52 percent said they would decrease spending, up from 43 percent inFebruary, while 27 percent said they would make no changes, and 18 percent saidthey plan to increase spending.

Little faith was expressed for the direction of thelarger economy, as 58 percent said it is getting worse, up from 44 percent inFebruary; while 22 percent think it is getting better, down from 31 percent theprior month; and 16 percent said it's staying the same, versus 24 percent lastmonth.

Views on the current economy were relatively unchangedover February: 59 percent rated the economy poor, 31 percent called it fair, 6percent said good, and 1 percent chose excellent.

Cash flow issues remained largely unchanged: 46 percentsaid their businesses encountered temporary cash flow issues in the past 90days that caused them to hold off on paying some bills, 47 percent did not haveissues, and 7 percent weren't sure.

 

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