If small business is the economic engine that makes America go, then it’s clear the “check engine” light is now on.
New data from the small business analytics firm PayNet shows investments by small manufacturers slowed down substantially in the first quarter. Even more worrisome, those business owners are cautious about growth in the second half of this year. “It’s surprising. It’s a cooling off,” says William Phelan, PayNet's co-founder and president. “If you see the relative changes going on here you can say they really have become more cautious and started to jam on the brakes.”
In the first quarter of this year, PayNet found investments by small manufacturers grew by 17 percent to approximately $13 billion. While that’s a healthy gain, it’s much slower that the 37 percent growth in 2011. In 2010, as the economy was coming out of the recession, small manufacturers boosted investment in their operations by 9 percent.