Small business owner optimism continues on a five-quarter decline, according to the recent Wells Fargo/Gallup Small Business Index (Index) survey conducted in April. The Index score dropped to 48, the lowest level reported since the survey's inception in August 2003, when the score was 69.



The most recent results represent a 35-point drop from the previous survey in January 2008, and a 66-point drop from the Index's highest score of 114 in December 2006. The 35-point drop is the Index's largest quarterly decrease to date. The Index score is the sum of both current and future expectations of small business owners for six key measures: financial situation, cash flow, revenues, capital allocation, job hiring, and credit availability.

Small business owners' future expectations for the next 12 months fell sharply to 30, a 15-point drop from the previous quarter. Small business owners' ratings of their current situation dropped 20 points from January to 18. While each of the six key measures in the Index continued to reflect a drop from the previous quarter, the most significant changes were found in small business owners' present revenue situation and future expectations for cash flow and financial situation.

"The nearly-50 percent drop in the Index clearly reflects the intensified financial pressures small business owners have felt over the last three months," said Dr. Scott Anderson, Wells Fargo senior economist. "The decline in both the present situation and future expectations components doesn't bode well for a swift recovery in small business conditions. However, as consumers begin to receive - and spend - their economic stimulus checks, this should soon begin easing the blow to small businesses in the third quarter of this year."

Despite the drop in overall optimism, survey respondents said they feel satisfied being small business owners. Satisfaction levels were relatively unchanged from January - down only four points to 86 percent. Additionally, 94 percent of respondents said they feel successful being a small business owner, virtually unchanged from all prior quarters.