Capital One Bank Releases Results of Its National Quarterly Small Business Barometer Survey
August 25 2011 - 8:00AM
Business Wire
Capital One Small Business today released the results of its
Small Business Barometer survey for the second quarter of 2011. The
quarterly survey polls small businesses across the nation, gauging
their current financial condition and business projections for the
next six months. Survey results from Capital One’s survey for the
second quarter, suggests that many U.S. small businesses are
experiencing gradual, but continued improvement in financial
performance. The small business leaders surveyed also report
growing confidence in the economic environment, which appears to be
contributing positively to hiring and investment decisions for
their business in the near term.
“Our second quarter survey results suggest that many small
businesses are seeing sustained improvement in business
performance. This is a trend we’ve seen developing over the last
few quarters and, while the pace has been modest, it has been
generally consistent and that’s definitely something we like to
see,” said Peter Appello, Executive Vice President of Small
Business Banking at Capital One Bank. “While there continues to be
a level of caution as businesses think about expenditures, we are
seeing a small but healthy uptick this quarter in the percentage of
small businesses planning to hire and increase spending on business
development and investments over the next six months. Although most
of those businesses planning to hire will keep expansion modest,
these results are encouraging for the second half of the year.”
Hiring Outlook
In the second quarter, an increased percentage of small
businesses from across the country reported plans to hire
additional employees over the next six months. Plans for expanding
the payroll, however, are modest.
- Over one-third (35 percent) of the
small businesses polled in the second quarter of 2011 plan to add
employees to the payroll over the next six months. This number is
up six percentage points from the first quarter of 2011 and shows
the highest percentage of small businesses planning to hire since
the first quarter of 2010.
- The large majority (78 percent) of
those businesses planning to hire over the next six months expect
to hire between one-10 employees. Eleven percent of respondents
believe they will hire 10-20 new employees in the near term.
- Including replacing employees who have
left the company, 56 percent of the small businesses polled have
hired over the past six months, but only 14 percent of those
businesses have hired more than 10 employees over that time
period.
- When asked about the primary factor
driving hiring decisions, the top answers were: replacement hires
(43 percent), hiring to support growth or expansion (21 percent)
and increase revenue or sales (16 percent).
- Only eight percent of the small
businesses surveyed report that concerns about credit access is a
consideration as they make their hiring decisions.
Economic Outlook, Financial Performance and Spending
The survey results for the second quarter of 2011 suggest that
small businesses continue to experience improving business
performance and remain relatively optimistic about economic
conditions, particularly as concerns about rising fuel costs have
eased relative to the first quarter of this year. With an improved
business outlook, a higher percentage of the small businesses
surveyed are planning to increase spending on business development
and investments in the near term.
- In the second quarter, 44 percent of
small businesses polled believe that economic conditions for their
business are improving. This number has increased a total of 12
percentage points year-over-year. Only nine percent of small
businesses polled believe economic conditions are getting
worse.
- About half (48 percent) of small
business owners surveyed report that their firm’s financial
position is better than it was one year ago, up five percentage
points from the first quarter of 2011 and 11 percentage points
higher on a year-over-year basis. Forty-two percent of small
businesses surveyed say that their firm’s financial position has
held steady relative to one year ago. Only nine percent of small
businesses report that their financial position has worsened over
the past year, compared to 19 percent in the second quarter of
2010.
- Twenty-seven percent of small
businesses polled report plans to increase spending on business
development and investments over the next six months, up 4
percentage points from the first quarter of this year.
Nevertheless, the majority (64 percent) of respondents plan to keep
spending at current levels in the near-term.
- Only 16 percent of small businesses
surveyed say that they expect fuel prices will place “extreme” or
“quite a lot” of pressure on their business over the next six
months, down 10 percentage points relative to the first quarter of
2011.
Availability of Financing
The survey results suggest that the availability of credit and
financing for small businesses continues to grow and fulfilling
capital needs is becoming less of a concern for small
businesses.
- Eighty-five of U.S. small businesses
surveyed report that they are able to access the financing they
need, consistent with results from the first quarter of 2011 but 12
percentage points higher on a year-over-year basis. Only 16 percent
of businesses polled have tried to obtain financing in the past 12
months.
- Only 16 percent of small businesses in
the survey say that securing the capital needed to continue
operations will be one of the biggest challenges they face over the
next six months.
Survey Methodology
The findings reported in this release are from a telephone
survey conducted by the opinion research firm, Braun Research of
Princeton, NJ. Braun Research interviewed a
nationally-representative sample of 1,904 for-profit small
businesses in the U.S., weighted to Dunn and Bradstreet counts of
all businesses nationwide by employee size and geography. Samples
were also taken in New York, New Jersey, Louisiana, Texas and the
Washington, D.C. metropolitan area. Small businesses are defined as
those with less than $10 million in annual revenue. The interviews
were conducted from June 13-July 1, 2011. All interviews were
conducted by telephone at their places of business. One respondent
per business was contacted. The margin of error is ± 2.3 percentage
points at the 95 percent confidence level. Interviews were
monitored at random. Sampling for this study was conducted using a
national sample of businesses drawn from InfoUSA. All interviews
were conducted using a computer assisted telephone interviewing
system. Statistical weights were designed from the United States
Department of Commerce to ensure proper inclusion of all SIC
codes.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a
financial holding company whose subsidiaries, which include Capital
One, N.A. and Capital One Bank (USA), N.A., had $126.1 billion in
deposits and $199.8 billion in total assets outstanding as of June
30, 2011. Headquartered in McLean, Virginia, Capital One offers a
broad spectrum of financial products and services to consumers,
small businesses and commercial clients. Capital One, N.A. has
approximately 1,000 branch locations primarily in New York, New
Jersey, Texas, Louisiana, Maryland, Virginia, and the District of
Columbia. A Fortune 500 company, Capital One trades on the New York
Stock Exchange under the symbol "COF" and is included in the
S&P 100 index.
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