Business owners are frustrated with the fiscal turmoil in Washington, D.C., but nearly half of them -- 45 percent -- are at least somewhat more confident in the growth prospects for their business than they were a year ago.
This pulse-reading comes from an annual economic outlook survey released Thursday from Pepperdine University and Dun & Bradstreet Credibility Corp.
The report shows about a quarter of business owners feel neither more nor less confident about growth prospects for their business than they were a year ago. That leaves only 30 percent at least somewhat less confident. The report is based on a 25-question survey between Jan. 14 and Jan. 28 to which 2,713 businesses responded.
While business owners are holding onto "cautious optimism," a declining number of business owners feel this way. That's troubling, says John K. Paglia, associate professor of finance at Pepperdine University, who collaborated on the survey. One year ago, 55 percent of survey respondents were at least somewhat more confident in growth prospects for their business and 26 percent were neither more nor less confident.
"Business owners have been struggling for the past few years, since the financial crisis hit, and they have remained hopeful," says Paglia. However, "as time continues to pass with no significant improvements in their operations, they are becoming increasingly frustrated and less hopeful."
Overall, business owners aren't as optimistic about the overall economy as they are about their own companies. They expect U.S. gross domestic product to inch up by only 0.4 percent in 2013, according to the survey. A year ago, business owners were more optimistic about economic growth and predicted that GDP for 2013 would grow by 1.9 percent.
Entrepreneurs's optimism about their own businesses stands in contrast to their dour expectations for the U.S. economy overall. "Small business owners and entrepreneurs are eternal optimists," says Jeff Stibel, chairman and CEO of Los Angeles-based Dun & Bradstreet Credibility Corp. He says typically entrepreneurs communicate pessimism only when they can't get access to capital to run their business. Of late, financing for small businesses has been improving slightly, he says.
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