Gallup: U.S. small-business owners' net capital spending intentions for the next 12 months plunged to -14 in November, the lowest level in more than two years, according to the Wells Fargo/Gallup Small Business Index. This is down from net capital spending intentions of -1 in July and suggests the nation's small-business owners are likely to pull back on their business investments even more, given their negative expectations for the next 12 months.
The Wells Fargo/Gallup quarterly survey, conducted Nov. 12-16, 2012, with a random sample of 607 U.S. small-business owners, found them the most pessimistic they have been since the third quarter of 2010. Capital spending is one of six components in the Future Expectations component of the index, all of which declined compared with the third quarter of 2012.
Pessimistic? Following the reelection of our Statist-in-Chief? Naaa, there couldn't be a connection. We've only heard about mass layoffs and downsizing ever since (hint: notice the date on this survey).
Rush: In 2004, 2005, 2006, 2007, this index -- the Wells Fargo/Gallup Small Business Index on Capital Spending Intentions -- was at anywhere from plus 28 to plus 16. Its low was minus 23 in 2009. Now it is minus 14. We've had, therefore, a net drop-off of 30 points. When you see it on the graph, it makes a little bit more sense. But as recently as 2008, small business net capital expenditure expansion spending was big, it was huge, and now it's at minus 14 for the next 12 months.
So it means no economic growth.
It means small business, which does most of the hiring, isn't gonna be doing any.
Get ready for more pain in 2013.
