Concerns about the economy and a steep drop in plans for hiring led to a steep decline in the confidence of distribution and wholesale companies during the fourth quarter of 2007, according to the latest Small Business Research Board report.
The study indicated that the Distribution &Wholesale Small Business Confidence Index dropped to 31 during the fourth quarter or 10 points (nearly 25%) from the 41 recorded during the prior quarter. The third quarter 2007 report was the first wholesale and distribution industry confidence index issued by the Small Business Research Board.
Declines in two of the three major categories comprising the confidence index contributed to the lower fourth quarter results.
Of the respondents, 24% said they believed the economy would improve during the next 12 months, which was 13 points fewer than the 37 who expressed such optimism during the third quarter. Concurrently, only 15% of the participants said they would increase hiring during the coming 12 months. This was 19 points fewer than the 34% who said they had plans for increased hiring when polled during the third quarter.
By contrast, 54% of the owners and managers participating in the poll said they believe revenues will increase during the coming 12 month period. This was 2 points more than the 52% who expressed the same opinion during the prior quarter.
The current distribution and wholesale industry confidence index is 2.67 points lower than the 33.67 reported for all U.S. small businesses during the fourth quarter of last year.
Read the MDM Reader Survey on the Economy Results.
More than 950 small business owners participated in the nationwide poll. The universe of participants is developed from among small businesses across the United States. The study is a voluntary survey conducted quarterly.
The Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations. IPA provides directly or through its affiliated companies a comprehensive array of business advisory services, tax and estate planning services or merger, acquisition and other financial advisory services in the U.S. and Canada.