More than half of U.S. small business owners believe the economy is already in recession, down slightly from July since April, even though most companies reported their own financial situation was strong, a survey showed.
The survey conducted in July by the National Federation of Independent Business focused primarily on small firms’ views on the state of banking and their credit needs and also showed that small businesses are far less concerned about the health of their bank than they were in the immediate aftermath of financial institution failures, including Silicon Valley Bank.
As for the economy, 52% of small business owners believe the economy is already in recession, up from 55% in April, according to the survey.
This belief comes despite broad signs of economic strength and mounting evidence that a long-predicted recession could be avoided.
Recent indicators have shown strong growth in retail sales and spending on services, the two largest sectors of activity for small businesses.
In addition, companies consider their own financial situation to be sound and their local economies to be relatively healthy.
More than two-thirds of all companies, for example, said their financial situation was “great” or “good,” down slightly from April but still robust, as consumer spending continues to outperform estimates and GDP expansion prospects for the third quarter are revised upward. Furthermore, 80% of businesses stated the local economy was “fine.”
More than half of owners were not at all concerned about the soundness of their bank, up from 31% in April, as the banking sector recovered from the second-largest banks crisis on record in the United States.
Concern among small businesses increased at the onset of the collapse, as 80% of all small businesses use a small, medium, or regional bank for their financial needs.
