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Survey Says: Everybody's Spending, Nobody's Hiring. Why?
Spending on recreation, leisure and dining out are all on the way up, but continued economic uncertainty is keeping small businesses on the sidelines.
Posted 10/ 5 10 at 4:00 PM | Business Trends, Technology, Money, Sales, Management, Taxes & Accounting, Business Products & Services, Consumer Products & Services, IT Services, Retail, Software
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I wrote on AOL Small Business last week that Americans are spending money on their passions despite the tough economy. A new survey from Sageworks backs up that finding, showing that two key "fun" spending categories -- restaurants and leisure -- are starting to bounce back. Here's a closer look at some of the latest small-business surveys.Consumers Just Wanna Have Fun
Sageworks reports that after declining more than 2.5 percent in 2009, spending on recreation and leisure activities grew more than 4 percent this year. And spending at full-service restaurants -- an industry that was especially hard-hit by the recession -- grew by nearly 3 percent, after about a 2 percent decline last year.
These figures don't surprise me -- anecdotally, at least where I live in southern California, I'm seeing more crowds at restaurants and in the malls.
Businesses Still Feeling Scrooge-ish
Consumers aren't the only ones feeling better -- 59 percent of small businesses expect increased sales and 56 percent expect increased profits in the next six months, according to the latest Office Depot Small Business Index.
But despite that optimistic outlook, 81 percent of small businesses aren't planning to hire. Why? Well, their stated reasons include higher health-care costs (18 percent), fear of higher taxes (15 percent) and continued economic uncertainty (14 percent). But looking at the survey results, I think the real reasons are actually related to the financial industry. Sixty-three percent of respondents expect their interest rates to rise in the next six months, and 78 percent think bank loans will become even harder to obtain. Will the newly passed legislation creating a $30 billion loan fund change entrepreneurs' mindset? Maybe, but that attitude adjustment is going to take a while.
Man vs. Machine
They may not be spending on hiring, but small businesses are getting ready to invest in technology. According to the CDW IT Monitor survey, which has tracked small business IT confidence since the recession began, over one-quarter (27 percent) of IT decision makers at small companies expect their IT budgets to grow in the next six months. That's up 3 percent since the June CDW IT Monitor and 8 percent since this time last year. And 17 percent of IT decision makers at small businesses say they are more likely to implement discretionary IT projects, up 4 percent since June.
These results mimic a lot of other research I've seen that shows small and midsize companies intend to increase their capital expenditures soon -- and much of that is directed at investing in new and updated technologies.
Rieva Lesonsky is CEO of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports.
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Comments (Page 1 of 1)
with increased t a x e s and less and less jobs why would you tink no one is spending GE just closed its last light bulb plant and did what like the 200 people have other jobs ?? get real like what they elected as a presadent good grief his plans my be working but no one else is
They aren't paying their mortgages or all of this 'fun' spending is on credit.
Doesn't take a genius to figure that out
How about all these 20 somethings in over $100,000 of debt -- $50,000 for student loan, $20,000 for car loan, $30,000 for credit cards by the age of 22
If people can't find Jobs, they should try to create their own by becoming entrepreneurs. They should find ways to start their own business. Any kind of business. After all, this is America, the land of opportunities. Smart Americans should start building Companies here in America in order to replace those that have betrayed the American people by moving their businesses overseas. Build new Companies in America and urge the public to buy American made products. And for all of those Companies that moved to China, Mexico and India, they should sell their merchandise in China, Mexico and India. We must stop buying cheap and poor quality foreign products. We, Americans have the power to stop buying things that are not made here in America. I guarantee you that will send them a clear message that we, Americans are looking out for ourselves. Why? It's because we care about ourselves and our family.
tyujrt
" It is the "New Normal". We need to understand that the job market is shifting with the economy to the world playing field and we must learn to play the game from the worker level to the corporations that have already left the US stadium."