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Tag Archives: Economy

Job Losses in Small Businesses in USA Due to Recession

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Recovery of small businesses in the U. S. from the recession was very slow. Most of the job losses during the end of 2009 were seen in small businesses. According to the statistics of labor department, 61.8% of job losses were seen in the fourth quarter of 2009 in the private sector. About 54.1% of new jobs were created. About 29% of all workers were employed by small businesses.

However, in 2008, there was a rise of job creation and less job losses, which has been reversed in 2009. It was believed that the effect of recession was ended by the fourth quarter of 2009. However, it was still continued in small businesses due to tight credit access. Regardless of the size of the businesses, around 200,000 jobs were lost in the fourth quarter.

About 17.8% of job losses was indicated in the fourth quarter among companies having employees between 50 and 249. 10% of job losses was reported in medium sized companies having employees between 250 and 999. These businesses added around 9.9% of new jobs. Among larger companies having more than 1,000 employees, 18.3% of all job gains and 17.7% of job losses were observed.

Slow liquidation of excess housing, fall of consumer demand, deleveraging by consumers and companies and others are some of the factors for job losses in small businesses during recession.

Recession resulted in decreased employment in almost all industries. Transportation and warehousing industries were the most affected ones with respect to employment. However, there was no effect on service-providing industries, health and education services, and professional and business services.

Filed under SMB's
Feb 14, 2011

Financing to Small Businesses in U.S Goes Up: Paynet Inc. Survey

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According to the latest survey reports released by Thomson Reuters/PayNet Small Business Lending Index, there is an increase of 2% in the borrowings by small businesses in U.S, in July.

As per the data released, in August, there is an increase in U.S consumer confidence and hence home prices gained more than expected. The above developments act as a respite for investors, showing the signs of economic recovery from the worst recession in decades.

But, with the government’s report on key monthly jobs, expected to be released soon, shows that in August, the unemployment rate rose to 9.6%, as the economy shed 100,000 jobs. This situation is very alarming and may even boost the current recession. But as per the separate data from PayNet, fewer companies have not yet done certain loan repayments. Due to the above reason, the economy is out of imminent danger of falling back in to recession, according to the analysts of PayNet.

According to PayNet, the accounts showing delinquencies are as follows:

  • Accounts having moderate delinquency (behind by 30 days or more) decreased to 2.98% in July from 3.06% in June.
  • Accounts, having severe delinquency, (90 days or more behind in payment) were down to 0.90% in July from 1.01% in June.
  • Accounts which are unlikely to ever get paid (behind 180 days or more), decreased to 0.85% of total receivables in July, from 0.89% in June.
Filed under SMB's
Jan 4, 2011

US Small Business After Crisis

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Small businesses in United States suffered a lot during 2007-2009 recession. As per a recent Deutsche Bank research survey, small businesses are showing an improvement in employment.

The key strengthening for the nascent US small business recovery is by improved sales outlook and access to financing. Small businesses have been slow in recovering because of deep losses in the most recent recession. First reason for this is that the construction sector which comprises of 86 percent of small firms was hard hit with recession and it has struggled a lot through out the downturn. The second reason is that the financial crisis. Due to recent recession, there were tighter terms of credit for loans to small businesses who relied more on traditional bank loans and other form of credit.

Uncertainty about the economy and lackluster sales are the main backlogs which are obstructing fast recovery of small businesses. According to a National Federation of Independent Business (NFIB) report published in February 2010, about 51 percent of small employers are finding slow or declining sales as their principal immediate economic problem. About 22 percent of them cited uncertainty and about 8 percent cited access to credit. Just 40 percent of the small businesses are trying to borrow in 2009.

There was also a negative impact of falling real estate values on small business owners’ ability and capacity to borrow as about 95 percent of small businesses were owning real estate.

There was also a fall in lending to small businesses as a result of the financial crisis. As per Federal Reserve, the loans to small businesses decreased from nearly USD 700 billion in second quarter of 2008 to circa USD 660 billion in first quarter of 2010.

Filed under SMB's
Nov 25, 2010

Economy Recovery is Still Fragile for Small Firms to Hire New Staff: FSB

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The unemployment in UK as increased to 2.5 million. As per FSB Voice of Small Business Index, small firms are recovering but are not in a position to increase the staff.

According to a survey of 1,400 members of the Federation of Small Businesses, about 63 percent of small businesses expressed that they will keep employing new employees on hold till the next 3 months. This shows that the small firms are not yet ready to increase their staff members.

Small business firms are showing a steady growth as the economy is recovering. About 16 percent of small businesses are expecting their overall business performance to improve over the upcoming months.

Though the economy is recovering, still it is fragile. About 23 percent of the respondents are expecting that their business situation would worsen over the next quarter. About 2 in 5 small business firms are expecting no change in the performance of their business.

Filed under SMB's
Nov 4, 2010

Low Consumer spending is the Top Concern of Small Businesses in UK

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According to a survey of businesses in UK, the biggest problem faced by small businesses is less customer spending. About 20 percent of the business owners who were polled by the Business Link for its Business Confidence Index mentioned that there was a fall in consumer spending and it is the major concern for the small businesses.

About 72 percent of the businesses are still feeling the effects of the downturn when compared to 63 percent past year which was when the country was technically in recession.

The entrepreneurs in London are primarily trying to decrease residual problems from the recession by refocusing on their core products and services or by cutting costs. There is a decrease in laying-off staff from 19 percent to 13 percent in the past 12 months. About 4 in 10 businesses believe that it is unnecessary to take some action to deal with the recession.

Filed under SMB's
Oct 21, 2010

Census Bureau: US Lost 104,000 Business Firms in 2008

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According to the US Census Bureau, US businesses with paid employees lost almost 104,000 firms in 2008 which brought the total number to 7.6 million. Nevertheless, the number of people employed increased to 121 million. Businesses added approximately 300,000 employees to their payrolls.

In County Business Pattern 2008, detailed annual information on the number of firms, employees, and quarterly and annual payroll for most of the 1,100 industries was covered at the national, state and country levels.

Business Establishments stats
Only 9 countries saw increase in the number of establishments in 2008 among 50 largest counties. Around 10 counties saw decline of more than 1,000 establishments.

Texas, Oklahoma, North Dakota and Wyoming were the 4 states which saw increase in establishments in 2008.

A 3.1 percent decrease from 2007 in business locations was seen in Florida which was the largest percentage. It represented more than 16,000 establishments.

Other than Florida, Michigan (2.6%), Idaho (2.5%) and Ohio(2.4%) decrease was observed with the largest percentage decreases in establishments.

Employment Stats
There was highest increase in percentage of employment from 2007 to 2008 in leading states and the District of Columbia. North Dakota with 4.1% added 12,000 employees and the New Hampshire with 3.9% adding 22,000 employees.

Philadelphia, Multnomah, were the counties with the highest increases in payroll. Philadelphia had a rise of 6.2 percent to an average of $48,993 and Multnomah had a rise of 3.6 percent to an average of $43.952.

In the healthcare and social assistance sector, there was gain more than 6,700 establishments and nearly 420,000 employees in 2008 from the past year, at the national level.

There was a loss of nearly 14,500 establishments which was a 3.8 percent decrease from the past year in the real estate and leasing sector.

Filed under SMB's
Sep 4, 2010

Impact of e-commerce on the worlds Economy

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Growing information and communications technology (ICT) leads to growth in e-business trend. This e-business has major macroeconomic impact on the economy and it could be justified with evidence of empirical studies.

Evidence from empirical studies, showed the impact of ICT on productivity and national economic growth. This is presented along with discussion of e-business, which changes the volatility and complicates measurement of growth. E-business is capable to bring down inflation, but it can also changed some monetary and fiscal policy challenges.

This is a way of coming future and it is also known as electronic commerce. This emerging followed the same development pattern that the automobile industry experienced 100 years ago. As per the Michael Dell, a successful e-commerce business can combine commerce, content and community together.

First decade of the new millennium is getting close but e-commerce is still in its primary stage but this brings equal opportunity to all firms to access to the international market.

Hence, e-commerce is a force which can change the pattern of profit and services which are sold. Because of its low and cheap marketing system it offers an equal opportunity to make marks in the new millennium.

Filed under Business
Jun 11, 2010

G-8 Group Pledge For Double Aid To Africa

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The G8 is a group of developed countries like Britain, Canada, France, Germany, Italy, Japan, Russia and the United States .All these nations of G-8 group promised to step up cooperation against Africa’s poverty. For this goal they pledged to double the donation amount to Africa by 2010. The G8 agreed on the need for concrete cooperation with fast-growing emerging donors such as China and India.

To achieve this motive, G-8 groups made transparency in aid policies with new donors. They also made efforts to encourage sustainability of aid and good governance, which are not corrupt and that can eliminate rich-poor gaps very effectively. The goal always has to remain constant and everybody is related to the millennium goals. These goals aim to achieve targets including halving extreme poverty and halting the spread of HIV/AIDS in limited or depleted areas by 2015.

The aid money, which had been donated used for education, health care systems and other serious problems.

Filed under Society
Mar 14, 2010