Wells Fargo Small Business Optimism Survey Goes Negative

For the first time in the nearly six-year history of the Wells Fargo Small Business Index, owner optimism dropped below zero for the first time in the survey’s history. The survey, which was conducted between January 22 and February 2, down 14 points from the previous survey and 118 points lower than the record high for the index, which was notched in November 2006. The zero point on the index scale means that business owners are neither optimistic nor pessimistic about the business and economic conditions of their companies.

The index measures the present conditions and near-future outlook for small businesses in a half-dozen key areas, including overall financial picture, cash flow, revenues, capital spending or planned capital improvements, hiring and the availability of credit.

Respondents to the survey did not reduce their hiring plans overall from the Q4 2008 survey, but did report more problems with cash flow, credit availability, slow growth in revenue and an overall decline in the respondents’ financial situation.

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Photo Credit: Cecile Graat

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