Small-business owners’ confidence in March fell to its lowest level in more than a year, according to new data Discover Financial Services released this week.
The Discover Small Business Watch index fell to 75.7 in March, down 9.2 points from 84.9 the previous month. The Watch index fell to as low as 71.9 in February of last year.
The Business Watch is a monthly report measuring the relative economic confidence 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.
Some 53% of small-business owners surveyed in March said they expect to see economic conditions deteriorate for their own businesses during the next six months compared with 37% who said so in February. Some 52% of respondents said they plan to decrease spending on their businesses, up from 43% who said so in February.
Asked to gauge the health of the economy at large, 58% of respondents this month said it is getting worse, up from 44% who said so in February, while 22% said they think the economy is getting better, down from 31% who said so last month. Some 16% of respondents said economic conditions are holding steady versus 24% who said so in February.
Although Discover has seen larger month-over-month declines in business-owner confidence, the new data suggests a pattern of restraint emerging, Ryan Scully, Discover business card director, said in a statement. “Small-business owners don’t like what they’re seeing, both at home and in the larger economy, and they’re responding by pulling back rather than just holding the line,” Scully said.
Most small-business owners did not benefit from tax breaks in 2009, according to the survey. Some 72% of small-business owners surveyed said they were unable to take advantage of tax breaks for their businesses or themselves last year, while 19% said they benefited from tax breaks and 9% were not sure.