Capital Spending Cut Back at U.S. Small Business — Gallup

Before you go, we thought you'd like these...
Before you go close icon

Old-fashioned Main StreetU.S. small business owners are planning to put capital spending on hold next year, according to a recent survey by Gallup. Only 20% of business owners expect to increase capital spending in 2013, compared with 34% who expect to spend less. The difference yields Gallup's index reading of -14, the lowest level in more than two years.

Capital spending plans reached a low reading of -23 in November 2008 and were slightly positive in the first half of this year before turning neutral in the third quarter.

The November survey also showed that 40% of small business owners cut their capital spending in the past 12 months, compared with 18% who increased spending. The index reading of -22 is roughly equal to a reading of -24 in October of last year.

Gallup notes a pattern of deferred capital spending since the recession of 2008-2009:

[M]any small businesses have experienced multiple capital spending deferrals and as a result are falling behind their competition, not only in capital improvements, but also in the use of new technologies. The longer this capital investment squeeze continues, the more of a threat it poses to the ultimate survival of any company in today's intensely competitive operating environment.

Gallup also suggests a "potential for explosive capital spending" when the U.S. economy gets back on a sustainable growth path.

Paul Ausick


Filed under: 24/7 Wall St. Wire, Economy Tagged: Gallup, small business, small business capital spending plans
Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners