Small businesses are showing more confidence in the economy, according to new survey data Discover Financial Services released Oct. 25
The Discover Small Business Watch index for this month rose to 84.2, up 10.4 points from 73.8 in September, marking the biggest one-month gain since April.
The Business Watch is a monthly report measuring the relative economic conditions of 750 randomly selected small-business owners based on their responses to six questions. Its creators established a base index of 100 when the Watch began in August 2006.
The renewed confidence in the economy is politically charged, Discover says. “Small-business owners are likely in a holding pattern with the rest of us to see how the economy responds after Election Day,” Ryan Scully, Discover business card director, said in a statement.
When Discover asked business owners whether there would be a greater impact on the economy if Republicans win control of Congress or if Democrats remain in the majority, “they leaned in the direction of having a change,” said Scully.
Some 51% of small-business owners said it would be better for Republicans to control Congress, while 39% said Democrats should stay in control, the index this month’s survey found. Small-business owners believe Republicans better understand the their needs.
This month’s survey found that 28% of small-business owners expect the economic conditions for their businesses to get better in the next six months, up from 20% who said so in September (see story). Of those surveyed, 43% believe economic conditions will get worse, down from 55% who did last month.
Overall economic perception is more optimistic, according to the index. Some 31% of small-business owners say the economy is getting better, up from only 26% who said so in September.
Meanwhile, the spending outlook for business development is improving, as 22% of small-business owners plan to increase spending, up from a record low of 16% in September. Only 46% plan to decrease spending, down from 57% in September.
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