ONE OneSmart International Education Group Limited

Bank One Economist Sees Good Conditions for Small Businesses to Grow CHICAGO, Feb. 17 /PRNewswire-FirstCall/ -- Small business owners are more optimistic than at any time since the 1980s, thanks to rising pricing power, favorable credit conditions and a change in tax laws, according to Bank One Senior Economist Peter Glassman. (Logo: http://www.newscom.com/cgi-bin/prnh/20030116/NYTH053LOGO ) "Gains were widespread, with increases in optimism spanning from the overall economy to earnings and, most importantly, sales," Glassman wrote in the debut issue of Bank One's Small Business Review, a quarterly report on the economic outlook for small business owners. Bank One's Small Business Review analyzes a quarterly survey conducted by the National Federation of Independent Business and provides an economic explanation for the results, along with implications of the findings. Big Budget + Election Year = Strong Production Gains The latest survey shows optimism jumped 1.7% in the first quarter, reaching a level higher than any during even the boom years of the 1990s. Small businesses also report plans to expand and increase inventories -- signs that production will jump. That means 2004 likely will be a good year for small business growth, particularly given the big spending that typically comes with an election year, Glassman said. "Real GDP growth could easily exceed current forecasts," he wrote. "Election-year politics and the recently passed $860 billion federal budget virtually assure it." Key Factors Aiding the Good Times While small business owners -- like many large companies -- continue to grapple with rising insurance costs, a number of key factors are looking up. Glassman noted: -- Strong demand for the products and services of small businesses, is allowing them to raise prices and boost hiring. -- Low short-term interest rates continue to make it easier for owners to borrow cash to invest in their businesses. -- New tax laws have made it possible for small businesses to take larger deductions, further boosting capital spending. "Not only were many businesses spurred to increase spending, but many more individuals likely decided to start their own business in order to cash in on the new laws," Glassman said. SUVs and Domestic Outsourcing What's more, many business owners are not only investing in facilities and production equipment, but are also taking advantage of the tax changes to buy vehicles that qualify for the deductions -- namelylarge, pricey SUVs, Glassman said. As companies raised prices in line with demand, those in the professional services industry did so most frequently -- evidence that not all of the good jobs are going abroad, despite frequent news of some firms closing U.S. facilities and opening operations overseas. "A much larger portion of outsourcing in the U.S. goes to small domestic businesses than to foreign providers," Glassman wrote, noting that law firms, computer consultants and temporary employment agencies are benefiting from domestic outsourcing. For more details, contact Calmetta Coleman at 312-732-6209 for a copy of the first quarter edition of the Small Business Review, or see it on online at http://www.bankone.com/economics . About Bank One Bank One Corporation (NYSE:ONE) ( http://www.bankone.com/ ) is the nation's sixth-largest bank holding company, with assets of $326 billion. Bank One currently has more than 50 million credit cards issued, nearly 7 million retail households, and over 20,000 middle market customers. It also manages $187 billion of clients' investment assets. http://www.newscom.com/cgi-bin/prnh/20030116/NYTH053LOGO http://photoarchive.ap.org/ DATASOURCE: Bank One CONTACT: Calmetta Coleman, Media Relations, +1-312-732-6209, or Peter Glassman, Senior Economist, +1-312-732-7849, both of Bank One Web site: http://www.bankone.com/ http://www.bankone.com/economics

Copyright