Small Businesses Still Pessimistic About Economy - Modern Distribution Management

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Small Businesses Still Pessimistic About Economy

Recent survey shows that poor sales and credit availability continue to be a challenge.
jenel-white
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While optimism seems to be taking hold across much of the business world, small businesses are still expressing pessimism about the state of the economy, according to the latest NFIB Small Business Economic Trends report. The optimism index lost 1.2 points in March, falling to 86.6.

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Part of the reason may be the type of businesses responding. About 20 percent of respondents operate in the construction sector, which was one of the first to collapse and is proving to be one of the slowest to recover. In his 2010 Wholesale Distribution Economic Report for the building material/construction distribution sector, Adam Fein of Pembroke Consulting does provide some reason for hope in the sector: He says that though revenues for construction/building material distributors fell 23.4 percent in 2009, sales will finally increase for that sector in 2010, the first time since 2006.

Still, poor sales continue to be a problem across the board, with 34 percent of respondents identifying this as the "single most important problem." And credit markets continue to be tight for small businesses.

The only "positive" change to the report? Slightly fewer respondents think the economy will worsen in the next six months. However, expectations about economic conditions remain negative.

Fein presents an outlook for 18 different distribution sectors, including construction and industrial, in his annual series, the 2010 Wholesale Distribution Economic Reports, a valuable tool for business planning for distributors, manufacturers that sell through distribution, or companies investing in distribution businesses.

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