Small Biz Watch: A good time to run a small business?
It's a pretty good time to be running a small business. Unless it isn't. Which is correct? Well, if you listen to the Democrats on the House Committee on Small Business, things are pretty bad. The third-quarter update to their Small Business Index—released last week—reached an eight-year low of 69.99, down 2 points from June.
In a statement, the group blamed the drop on "several factors, including rising energy and healthcare costs, skyrocketing interest rates, and reduced business confidence, as playing a major role in the decline—and that Hurricane Katrina has impacted not only the Gulf Coast region's economy but also small businesses nationwide." By contrast, the most recent analysis of small-business attitudes from the National Federation of Independent Business found optimism climbing and concluded that the "recent hurricanes had little effect on the nation's overall economy." More business owners were planning on hiring in the fourth quarter, according to the NFIB survey, and more were forecasting a better economy.
To break the tie, I asked Mark Vitner, senior economist at Wachovia, to rate the current economic condition for small business. His take on the situation: "It's not great, but it is good, which is where it is most of the time. Interest rates are near historic lows—which is very important to small business—and the economy has grown in excess of 3½ percent each of the past eight quarters. It is unfathomable that small business would find this the worst environment in eight years."