“Business activity fell off sharply during recession, and there’s been very little recovery,” he said.
The uncertainty arises from various factors: Europe’s financial crisis, the so-called Fiscal Cliff, and general political uncertainty surrounding the presidential election.
“Europe is part of it because they may sell overseas or sell to someone overseas,” Vitner said, “but the larger issues are tax and regulatory policies.”
Until Congress works out a tax deal that prevents the Fiscal Cliff on Jan. 1, 2013, small business owners have said they are too afraid to spend or hire because they don’t know what the tax implications may be. Meanwhile, Vitner said he hears small business owners consistently concerned that the current regulatory environment is too stringent.
President Barack Obama has launched several initiatives aimed at helping businesses, such as Startup America and his Council on Jobs and Competitiveness. And last month, the White House launched a website to gather tips from businesses on burdensome regulations.
“For many businesses, their growth prospects are lost in a fog of uncertainty. You can drive in the fog, but you can’t drive that fast,” Vitner said. “Once we get past the election and the Fiscal Cliff, the clouds will be removed and people will be able to plan.”
The Wells Fargo/Gallup Small Business Index has surveyed small business owners since August 2003. The index consists of two dimensions: owners’ ratings of their current situation; and owners’ ratings of how they expect their businesses to perform over the next year. The results are based on telephone interviews with 600 small business owners in 50 states, in this case conducted July 9-13. The margin of error is plus or minus four percentage points.
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