Anticipating a protracted recovery, small-business owners are pulling back their spending, according to Discover Financial Services.
The Riverwoods, Ill., credit card company said Monday that its monthly Small Business Watch index inched upward this month, to 88.5, from 87.7 in September. The index was pegged at 100 when it was created in 2006.
The company said that 55% of small-business owners rate the economy as poor, up from 53% last month, but that 36% say it is fair and 8% say it is good or excellent.
Forty-four percent think the economy is getting worse, down from 46% last month, and 35% think the economy is improving. About 29% of small-business owners said conditions for their own companies are improving, the same as in September, but 43% said conditions are getting worse.
Half of the proprietors said it will be 12 months or more before most people in the country think the economy has stabilized; 28% said it would take six to 12 months, and 13% said it will happen within six months. Nine percent were uncertain.
More than two-thirds of the small-business owners, 69%, said the economic slump has hurt their business, and 43% said it would be more than a year before their companies rebound.
About 23% of the proprietors said they plan to invest more in their companies in the next six months, down from 25% in September, and 50% said they plan to diminish their spending, compared to 44% last month.
"Small-business owners aren't showing any new optimism in the economy," said Ryan Scully, the director of Discover's small-business cards unit.