SAN FRANCISCO (AP) — Uncertainty emanating from Washington has small-business owners increasingly apprehensive and more likely to decrease hiring over the next year, according to a postelection survey released Friday.
The quarterly national survey of small-business owners by Wells Fargo and Gallup found that owners are now the most pessimistic they have been since the third quarter of 2010.
One in five small-business owners said they expect to decrease hiring and one in three expect to decrease capital spending over the next 12 months, according to the survey conducted in mid-November.
"Business owners who navigated through the Great Recession now face more uncharted territory created by ongoing uncertainty in Washington," Marc Bernstein, head of small business for Wells Fargo & Co., said in a statement. "These owners know that potential federal government spending cuts and tax changes can create a ripple effect, hitting the pocketbooks of consumers and reducing spending that could hit small businesses hard."
Unless Congress and the White House can reach an agreement for reducing the deficit before the end of the year, a series of tax increases and government spending cuts will kick in. Economists believe that could send the U.S. back into recession.
The survey found that 50 percent of owners expect their business' financial situation will be at least somewhat good in the coming year, down from 59 percent in the prior quarter. Meanwhile, 28 percent expect their company's financial situation to be poor or very poor, up from 20 percent.
The results are based on telephone interviews with 607 small business owners in 50 states.