Survey Shows Idling Economy

July 10, 2003
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GRAND RAPIDS — Results of the Small Business Association of Michigan’s Small Business Barometer survey, released yesterday, indicate that the state’s small business economy is stuck in neutral.

Two hundred small businesses were interviewed in May for the quarterly survey, which is now in its tenth year and is sponsored by SBAM with participation and support from the Center for Urban Studies at Wayne State University.

“We keep waiting for something to happen that will tip the small business economy over the top and get it moving toward prosperity,” said Michael Rogers, vice president of communications for SBAM. “This latest survey was done in mid-May, and since that time Congress passed the President’s federal tax cut program and the Federal Reserve again cut interest rates. We’re hoping that’s enough stimulus to get things revved up again.”

More small businesses reported they had sales decreases in the second quarter than those that reported increases. In February, however, 41 percent of small businesses reported decreases while the number dropped to 35 percent reporting decreases in May. Over that same time, those reporting sales increases rose from 18 percent to 22 percent.

Reports of increases in profitability also rose marginally. Fifteen percent in the first quarter said they had increases in profits, but that number rose to 19 percent in the second quarter.

In the second quarter survey, 41 percent of small business owners expected increased profitability in the third quarter, while 36 percent expected increased employee wages. Both projections were the lowest percentages in the past six quarters of Barometer surveys.           

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