Posted by: Greg T. Spielberg on July 17
Green shoots? Survey shows credit still arid
Owners of small- and mid-sized businesses are feeling better about the economy’s prospects, financial services consultancy Greenwich Associates reports. Most of some 750 business owners quizzed by the firm in a July survey expect growth in the fourth quarter.
This is the first time since the second quarter of 2006 that those with mid-sized businesses said they expect to see gains in the economy. Small-business owners have not expected growth since the opening quarter of 2007.
The attitudes of such small- and mid-sized biz owners are crucial, considering the central role these businesses play in the economy. BusinessWeek’s John Tozzi points out that 35% of job loss in the first three quarters of last year took place in businesses with fewer than 20 employees. If such businesses need to hire again, they could have a potent effect on the economy.
Problem is, it’s not raining credit. Almost 66% of mid-sized owners told Greenwich Associates that credit is tough to come by, and 70% of small-biz owners feel the same. How, then, can businesses expect increased production without the fuel? “That’s the rub,” says Steve Busby, the firm's managing director. It seems owners expect national growth even if their own prospects look cloudy. Or, they are hoping that expansion -- or optimism about expansion -- will loosen up credit for firms like theirs.
BusinessWeek’s Joe Weber, Patricia O'Connell, Michelle Conlin, Frederik Balfour, Peter Coy, Greg Spielberg and Roger Crockett examine The Case for Optimism by looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership.
See why BusinessWeek Editor-In-Chief Stephen J. Adler is optimistic about the economy amid the sharpest downturn since the Great Depression.