Small business executives taking the threat "very seriously"
The as yet too-close-to-call presidential election and the looming fiscal cliff have darkened the 2013 economic outlook, executives at U.S. small businesses said in a recent survey conducted by business advisory firm Vintage International.
The Vistage Confidence Index dropped to 89 for the third quarter, down from 92.8 during the second quarter and 105.1 in the first quarter. The index, which stood at 83.5 in the third quarter of 2011, when the debt ceiling debate led to the S&P downgrade of the U.S. credit rating and sparked market volatility, indicates mounting concerns that lawmakers may be unwilling or unable to take action on the tax increases and spending cuts set to take effect at year’s end.
Just over half of the 1,504 CEOs surveyed said they are taking the threat of the fiscal cliff “very seriously,” while another 593 are taking it “somewhat seriously.” Fifty-seven percent said the expiration of the Bush-era tax cuts for those making more than $250,000 annually would adversely affect them and their businesses.
Economic uncertainty is the most significant business issue, the survey found, with almost one-third (30 percent) saying it is a major concern.
Half of the CEOs said that economic conditions are largely unchanged since last year, and 45 percent next year to be about the same. But half said they expect to hire new employees over the next 12 months and two-thirds forecast a likely increase in their firms’ revenues. Only 9 percent anticipate layoffs.
Concerns over the fiscal cliff are mirrored in a survey conducted in September by Millionaire Corner. This issue is of most concern to senior corporate executives (46 percent) and business owners (50 percent).
High net worth investors surveyed last July by Millionaire Corner are equally concerned. Close to 47 percent are “very concerned” and worry that the nation will slip back into recession. But roughly 44 percent are only “mildly concerned,” and anticipate that a political consensus will minimize the effects of the fiscal cliff, though taxes will go up and the levels of government services will go down.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.