Survey of SMEs shows confidence in survival in spite of poor economic outlook


A recent survey by Greenwich Associates, a Connecticut institutional financial services consulting and research firm, indicates 18.8 per cent of small businesses surveyed expect the economy to deteriorate over the next six months, while 47.4 per cent expect no change.

This pessimism is leading many small businesses to spend less. According to the US Census Bureau, businesses invested 4 per cent less on capital goods like new equipment and structures in 2001. "Small-business owners feel more vulnerable to downturns in spending and thus spend less themselves," says Barbara Bird, chair of the management department at American University's Kogod School of Business in Washington, DC. "In some ways, they are caught in the middle of trickle-down, where big firms don't spend on purchases from smalls, and trickle-up, where consumers withhold spending due to fears of war, unemployment and lousy stock markets."



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