By Saabira Chaudhuri
Small businesses in the U.S. reported modest but steady
improvements in their finances in the second quarter with an
increasing number reporting plans to hire staff, according to a
survey by Capital One Financial Corp. (COF).
"This quarter's survey results suggest that business is
generally holding steady for small businesses; the current economic
environment and overall business performance continue to hold their
own or improve," said Jon Witter, president of retail and direct
banking.
The survey reported a two-year high in the percentage of small
businesses planning to add jobs over the next six months, with 37%
reporting plans to hire, up two points from last year and three
points from the first quarter. Difficulty in finding the right
talent to fill available openings remains relatively consistent
with last quarter. About 16% of small businesses say they have job
openings they are unable to fill, up one point from the previous
quarter.
Seven in 10 of the country's small businesses plan to keep
spending at the same levels, the highest amount in the last two
years. This is a nine-point increase from the previous quarter and
five points higher than it was one year ago.
Meanwhile, 15% of small businesses forecast increasing business
development and investment spending, down 10 points from the
previous quarter and 12 points lower than a year ago.
About 44% of small businesses report that their business
financials have remained stable or improved since a year ago, while
about 15% of small businesses say their financial position is worse
now than a year ago.
Small business perceptions regarding local economic conditions
remain relatively unchanged, showing small business owners are less
optimistic about business prospects in the months ahead, according
to Capital One. Small businesses rate the national business
outlook, which measures business prospects over the next six
months, at six out of 10 points, with one being significantly
worse, and 10 being significantly better. In the previous quarter,
this rating was 6.4%.
About a quarter of U.S. small businesses reported they have
tried to obtain financing in the last 12 months, the highest that
this figure has been over the last nine quarters of survey
data.
Among businesses seeking to obtain financing over the last 12
months, the manufacturing and construction sectors represent the
highest percentage of those seeking the extra support. About 42% of
small businesses report that obtaining financing is harder than it
was six months ago, a decrease of 10 points from the previous
quarter. Fewer than 9% of small businesses report that obtaining
financing is easier than it was six months ago, a decrease of five
points from the previous quarter.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com