Month: May 2013

What business recovery?

The 2012 election is over. The fiscal cliff can was kicked down the road (yet again), and the sequester and debt ceiling debates have been volleyed by the partisans. And now the mainstream media and politicians are saying that we’re in a recovery.

Business owners aren’t convinced. They’ve been dealing with uncertainty over tax increases, health care changes and increasing small business regulations for years, and here’s what they’re facing right now:

  • They’ve been waiting for this “business recovery” for for five years.
  • Too many small businesses have been hit hard by weak demand, slowing cash flow and the inability to service business debt. Since banks and lending institutions have severely curtailed small business lending,business owners are finding themselves with serious financial difficulties that threaten otherwise viable companies.
  • Job growth is falling behind the dismal 2012 trend.
  • Manufacturing indexes are disappointing.
  • The service growth sector has hit a seven-month low.
  • Companies are currently issuing strongly negative outlooks.

Business owners: “What recovery?”

Business owners voiced their concerns in the respected NFIB Small Business Optimism Index survey released in March 2013:

While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed. Far more firms report sales down quarter over quarter than up. Washington is manufacturing one crisis after another—the debt ceiling, the fiscal cliff and the sequester. Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship. Three-quarters of small business owners think that business conditions will be the same or worse in six months.

Does that sound like a business recovery to you? Hardly. These indicators are the tip of a very dangerous iceberg — actually, three icebergs, each of which threatens to turn an economy on life support into another major financial crisis.