Small business owners’ optimism recently dropped to its lowest level in the six years of the Wells Fargo/Gallup Small Business Index history. Covering a survey period July 7 – July 14, 2009, the score now stands at negative 21 (-21), down 20 points from the previous survey (April, 2009), and 135 points lower than the Index high of 114 (November, 2006). This is the third consecutive quarter with a negative (below zero) Index score. A score of zero indicates that small business owners, as a group, are neutral -- neither optimistic nor pessimistic -- about their companies’ situations.
About the Small Business Index
For the last 25 quarters, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on current and future perceptions of their business financial situation. The Index consists of two dimensions: 1) Owners’ ratings of the current situation of their businesses and, 2) Owners’ ratings of how they expect their businesses to perform over the next 12 months. An Index score of zero indicates that small business owners, as a group, are neutral -- neither optimistic nor pessimistic -- about their companies’ situations. Results are based on telephone interviews with 603 small business owners nationwide conducted July 7- July 14, 2009. The Overall Small Business Index is computed from a formula that scores and sums the answers to 12 questions—6 about the present situation and 6 about the future. The Overall index can range from -400 (the most negative score possible) to +400 (the most positive score possible), but in practice takes on a much more limited range. The margin of sampling error is +/- 4 percentage points.
