Location: Minneapolis
Author: Ray Johns
Date: Wednesday, February 4, 2009
More than half of the respondents to Barlow Research’s latest Economic Pulse Survey expect the current recession to last beyond 2009.
According to Keith Leggett Senior Economist at American Bankers Association, “ABA’s Economic Advisory Committeeisforecasting that we will see the first stages of recovery in the second half of 2009. This is a clear indication that there is a large level of pessimism amongst small businesses.”
Based on the Economic Pulse Survey results, Barlow Research estimates that the 1st quarter Barlow Small Business Economic Index will fall to a historic low of 64, a 12 point slide from the Barlow Small Business Economic Index score of 76 for the 4th quarter of 2008.
Much of the media is focused on credit availability as a major driver of the current economic recession. The Economic Pulse Survey shows that small business and middle market companies are reporting similar rates of being denied credit (11% and 12% respectively).
“While bank health seems to be the biggest problem for the government and the Federal Reserve System, banks do not seem to be a big problem for small and intermediate-sized businesses,” said Robert Brusca, Chief Economist at Fact and Opinion Economics. “For them it’s the economy, stupid, as a former president once said.”
The Economic Pulse Survey continues to show strong regional differences concerning the 1st quarter 2009 estimate of the Barlow Small Business Economic Index.
The Northeast region of the country maintains its pessimistic trend, whereas the West region is starting to show some signs of increased optimism which may come from a strong belief in the future financial condition of their own company.
The survey results also show that in addition to decreased sales and profits in 2008, about 40% of businesses altered their long-range plan and about half of the financial decision makers plan to postpone their retirement.
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