Small business confidence holds steady
Business owners' confidence in the economy remains in line with January, but higher gas prices are a big concern.
NEW YORK (CNNMoney.com) -- Small business owners' confidence in the economy stayed steady in February as optimism about their own business fortunes was offset by an increase in concern about cash flow, according to a survey released Tuesday.
Discover's Small Business confidence measure fell less than a point to 113.4 from January's 114.3.
Optimism was reflected on the hiring front: 17 percent of owners plan to hire more workers in February, up from 14 percent last month; 39 percent also plan to spend more on business development, which is up from 35 percent in January.
However, concerns about cash flow also rose. Forty percent of business owners who sell products reported a significant jump in cash flow concerns, up from 24 percent in the previous month, the survey said.
"Economic confidence appears to be steady. However, cash flow is something to keep an eye on when it comes to small business indicators," Sastry Rachakonda, director of Discover's small business credit card, said in a statement.
The energy effect
Thirty-nine percent of respondents said that changes in gasoline prices affect profitability, while 48 percent said the effects are minor and 13 percent said they were of no consequence.
When asked to name their largest energy expense, 36 percent of small business owners cited gasoline, but an unexpected 42 percent said they have no significant energy expenses. Of the remaining respondents, 13 percent named electricity, followed by fuel oil, 6 percent, and natural gas, 3 percent.
"Gasoline prices are important to four out of every 10 small business owners, and 52 percent of them expect gas prices to increase in the next three months," Rachakonda said. "It will be extremely interesting to see how this plays out in terms of small business confidence."
Among the consumers surveyed, 66 percent said they expect to be charged more by small businesses when gas prices go up. Meanwhile, 77 percent expect large businesses to do the same.
Many consumers seem to support businesses that adopt green energy practices: 42 percent of them said they would pay higher prices for goods and services from such businesses, while 34 percent said they were unwilling to do so and 25 percent were undecided.
Fifty-seven percent of small business owners said their operations would be more energy-efficient if the government offered incentives, such as tax breaks; and 52 percent said that the government did not do enough to help small businesses be more energy efficient.