Small businesses continue to show improvements, remain steady, but
express concerns for remainder of the year, according to second quarter
2012 survey data
MCLEAN, Va.--(BUSINESS WIRE)--Aug. 21, 2012--
Small businesses across the country are reporting generally modest but
steady improvement in their finances, according to Capital One’s second
quarter 2012 Small Business Barometer, a quarterly survey of
small businesses across the nation examining general economic indicators
and small business perceptions of the economic environment, gauging
current financial conditions and business projections for the next six
months. Looking back over the past year, the survey results indicate
that small businesses continue to show signs of improvement. Small
businesses started the year off on more solid footing in the first
quarter of 2012 and the initial gains over 2011 have remained
consistent, even showing some improvement in the second quarter of the
year. On the hiring front, the survey found a two-year high in the
percentage of small businesses planning to add jobs over the next six
month, with 37 percent reporting plans to hire.
The majority of small businesses report that their business financials
have remained stable or improved, with 44 percent reporting improved
financial position compared to one year ago. However, small business
perceptions regarding local economic conditions remain relatively
unchanged and, despite the improvement in company financials, the data
shows small business owners are less optimistic about business prospects
in the months ahead. The national business outlook indicates that
concerns over sales and price margins, have diminished small business
confidence in their prospects for the remainder of 2012.
“This quarter’s survey results suggest that business is generally
holding steady for small businesses; the current economic environment
and overall business performance continue to hold their own or improve,
and while hiring is far short of pre-recession levels, we’re seeing
small businesses making plans to hire new employees in numbers that are
among the highest we’ve seen in the past two years,” said Jon Witter,
President, Retail and Direct Banking at Capital One. “Though these are
promising signs, as we look forward, we’re also seeing some hesitancy
and concern about prospects for the remainder of the year, as well as a
limited line of sight to growth – demonstrating small business owners
are moving forward with continued caution and pragmatism as they
consider their plans and projections for the coming months.”
Financial Performance and Spending
Economic conditions for small businesses nationally are holding steady.
Nearly half (45 percent) of small businesses report that economic
conditions for their business are about the same, a two-point increase
from the previous quarter and one point lower than in the second quarter
of 2011. More than a third (38 percent) of small businesses report
improving economic conditions. This is one point lower than last quarter
and six points lower than the two-year high of 44 percent last year (Q2
2011). While a majority of small businesses believe economic conditions
are the same or improving, a sizable portion of small businesses (17
percent) believe economic conditions are getting worse.
The majority of small businesses are in a better financial position than
last year. Forty-four percent of small businesses say their firm's
financial position is better than a year ago. This is a two-point
increase from the previous quarter, and higher than those who say that
their position is about the same (40 percent). Only fifteen percent of
small businesses say their financial position has gotten worse. This is
two points lower than the previous quarter, but is still six points
higher than the two-year low of 9 percent set in Q2 2011.
Economic Outlook and Business Pressures
Small business perceptions of the economic outlook for business
prospects over the next six months show that owners are mildly
optimistic. The national business outlook is a measure of business
prospects over the next six months on a scale of significantly worse (1)
to significantly better (10). Even though they are faced with favorable
economic conditions and better financial performance, small businesses
rate the national business outlook at 6.0 out of 10 points, 0.4 points
lower than the 6.4 from the previous quarter. Conversely, all business
indicators are having a larger impact on business prospects than last
quarter. Price margins are expected to have the most impact on business
prospects, also having the largest change since last quarter (0.7-point
increase).
Hiring & Spending Outlook
Across the country, more small businesses are forecasting increases in
hiring employees in the next six months. More than a third (37 percent)
of small businesses plan to hire additional employees, a two-year high.
This is two points higher than last year (Q2 2011) and three points
higher than last quarter (Q1 2012). Difficulty in finding the right
talent to fill available openings remains relatively consistent with
last quarter. Sixteen percent of small businesses say they have job
openings they are unable to fill, up one point from the previous quarter.
The majority of small businesses will keep spending, business
development and investment consistent. Seven in ten of the country’s
small businesses plan to keep spending at the same levels, the highest
amount in the last two years. This is a nine-point increase from the
previous quarter and five points higher than it was one year ago. This
shift parallels the decrease of small businesses that plan to increase
spending. Only 15 percent of small businesses forecast increasing
business development and investment spending, 10 points lower than the
previous quarter and 12 points lower than the two-year high of 27
percent one year ago.
Availability of Financing
In the second-quarter survey, a quarter of U.S. small businesses
reported they have tried to obtain financing in the last 12 months. This
figure, the highest it has been over the last nine quarters of survey
data, is two points higher than the previous quarter and nine points
higher than one year ago (Q2 2011). Among businesses seeking to obtain
financing over the last twelve months, the manufacturing and
construction sectors represent the highest percentage of those seeking
the extra support. More than two-fifths (42%) of small businesses report
that obtaining financing is harder than it was six months ago, a
decrease of 10 points from the previous quarter. Less than one-in-ten (9
percent) of small businesses report that obtaining financing is easier
than it was six months ago, a decrease of 5 points from the previous
quarter.
Survey Methodology
The findings reported in this release are from a telephone survey
conducted by the opinion research firm, Braun Research of Princeton,
N.J. Braun Research interviewed a nationally-representative sample of
1,901 for-profit small businesses in the U.S., weighted to Dunn and
Bradstreet counts of all businesses nationwide by employee size and
geography. Samples were also taken in New York, New Jersey, Louisiana,
Texas and the Washington, D.C. metropolitan area. Small businesses are
defined as those with less than $10 million in annual revenue. The
interviews were conducted from June 14 – 28, 2012. All interviews were
conducted by telephone at their places of business. One respondent per
business was contacted. The margin of error is ± 2.2 percentage points
at the 95% confidence level. Interviews were monitored at random.
Sampling for this study was conducted using a national sample of
businesses drawn from InfoUSA. All interviews were conducted using a
computer-assisted telephone interviewing system. Statistical weights
were designed from the United States Department of Commerce to ensure
proper inclusion of all SIC codes.
About Capital One
Capital One Financial Corporation (http://www.capitalone.com/)
is a financial holding company whose subsidiaries, which include Capital
One, N.A., Capital One Bank (USA), N. A., and ING Bank, fsb, had $213.9
billion in deposits and $296.6 billion in total assets outstanding as of
June 30, 2012. Headquartered in McLean, Virginia, Capital One and ING
DIRECT offer a broad spectrum of financial products and services to
consumers, small businesses and commercial clients through a variety of
channels. Capital One, N.A. has approximately 1,000 branch locations
primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia
and the District of Columbia. A Fortune 500 company, Capital One trades
on the New York Stock Exchange under the symbol "COF" and is included in
the S&P 100 index.
Source: Capital One Financial Corporation
Capital One Financial Corporation
Steve Schooff, 212-216-8984
steve.schooff@capitalone.com
