Most small business owners
would agree that small businesses are not recovering as well as larger
businesses during the current recession. Denny Dennis, of the National
Federation of Independent Businesses, shares that view.
Dennis told members of the
Southern Chester County Chamber of Commerce, during a May 17 luncheon, that the
current recovery is different than others since the 1970s when small businesses
recovered first.
“We are in the midst of a very
slow and very difficult recovery,” he said. “Unfortunately it’s in two parts.
Large manufacturers are often doing quite well. Small firms are just the
opposite. Small firms usually lead us out of recessions, this time they are the
last. We are vastly behind other recoveries,” he said.
There are reasons for the
difference this time. Dennis cited industry issues, cash flow and collateral
issues—especially since small businesses own a lot of real estate that’s used
as collateral. There is also a lack of confidence coupled with uncertainty.
Among the areas of uncertainty
are issues concerning taxes and health insurance, sovereign debt—cities, states
and countries may default—and political gridlock.
Industrial and construction
concerns center around the housing market, he said. According to Dennis, the
country has gone from 2.5 million housing starts per year to 500,000. It is
coming back, but just up to 600,000, he said.
According to Dennis, 1.5
million starts keep things at a parallel. Now, though, all that’s happening is
that the economy is making up for the previous excess. On top of that, the
economy has lost 30 percent of the housing real estate value. The commercial
market has dropped, too.
Then there are the consumer
goods.
‘We’re buying durable goods and
we’re buying manufactured products, just liked we always did. This would be a
very normal recovery if we were talking about automobiles and shirts and things
liked that. Unfortunately, this isn’t happening in the service industry.”
That’s where most of the small
businesses are, he said. Dennis likened the recovery to a basketball, but one
where the ball is only partially inflated.
“It bounces a little bit, but
doesn’t go anywhere,” Dennis said.
There is some recovery, as seen
over the last three quarters, but it remains slow. He said it might take until
2013 before the economy is back to normal.
About Rich Schwartzman
Rich Schwartzman has been reporting on events in the greater Chadds Ford area since September 2001 when he became the founding editor of The Chadds Ford Post. In April 2009 he became managing editor of ChaddsFordLive. He is also an award-winning photographer.
(No Ratings Yet)
Loading...
Comments