More than 85% of small-business owners are worried about a double-dip recession, according to the latest quarterly survey by banking giant Citigroup.
But three-quarters of those polled said they are very or somewhat prepared for another downturn.
Mirroring results of previous surveys, 76% rated current business conditions as fair or poor, although the portion calling conditions fair increased to 42% from 38% in the previous quarter and those labeling conditions poor declined to 34% from 40% in April.
Respondents generally were more optimistic in the latest survey compared with three months ago. Recently, 28% said their business was better off today than a year ago, up from 24% last quarter. While 42% expect their business to improve in 12 months, down 1 percentage point from April, only 13% said conditions will worsen, down from 17%. The portion expecting conditions to remain about the same grew to 45% from 40%.
Mentioned most often as a primary challenge to running their business was higher taxes by 48% of respondants. Declining demand for products and services was next at 43%, followed by tighter business regulations and the cost of health insurance, each by 40%.
Regarding hiring plans, 7% of surveyed small-business owners expect to reduce their work force, down from 8% in April, while the portion planning to hire was flat at 17%. Nine in 10 said they would need to see sales increase for at least two quarters in a row before they would hire new employees.
Other recent surveys have offered similar reassuring news on small-business hiring. In a poll released Monday by Discover Financial Services (DFS), 20% of small-business owners questioned said they were laying off workers--the smallest percentage planning layoffs in the four-year history of that survey. And a National Federation of Independent Business survey in July found small-business hiring plans at their highest since fall 2008.
According to the latest Citigroup survey, 64% of respondents said they have forever changed the way they run their business, with 42% reducing debt, 40% increasing cash reserves, 34% freezing hiring and 32% delaying plans for expansion.
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