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Survey: Small-business outlook, hiring weakens

Survey: Small-business outlook, hiring weakens
From Tribune news services
Published October 3, 2005

CLEVELAND -- The confidence of small-business owners in the Midwest fell in September to 70 percent from 71.5 percent in August, according to a monthly survey released Friday by National City Corp.

The index measures the attitudes of small-business owners in Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio and Pennsylvania.

"The decline in confidence comes as no surprise given the events of the last month," said Richard DeKaser, chief economist for National City. "While the 70 percent reading indicated that the majority of respondents still remain positive, September now marks the low point of the survey's history, with declines across each of the seven states."

The survey, which began in January 2005, canvasses businesses with annual sales of $5 million or less.

"More notable than the overall decline is the new low for the percentage of businesses planning to increase employment, which slipped to 59 percent from 60.6 percent," said DeKaser. "Hiring plans tend to reflect more concrete, action-oriented sentiments than those relating to the general business environment."

While sentiment declined in all seven states, Illinois and Pennsylvania suffered the largest drops. The slide in Illinois came on the heels of the state's best-ever reading in August. Michigan showed the lowest confidence reading for the third consecutive month.

"The results of the September survey show that the increased uncertainty from oil prices and hurricanes has affected the outlook of small-business owners in our region," said National City's Eric Renner, who oversees small-business banking in Illinois.

The results were less consistent on an industry basis. Five of the six major industrial sectors showed slippage in September, but the biggest decline was in the transportation and utilities sector. Retailers and wholesalers, however, came in last for the third straight month.


LINK: http://www.chicagotribune.com/business/chi-0510020530oct03,1,5970356.story?coll=chi-business-hed&...