1 in 5 small businesses plan layoffs


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Posted Online: Dec. 06, 2012, 9:14 pm
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McClatchy News Service
The job outlook at America's small businesses is the worst it's ever been, according to new research.

Last month, 21 percent of small-business owners said they expected to lower head count over the next six months — the highest percentage recorded by the Wells Fargo/Gallup Small Business Index since its launch in 2003. In July, the last time the data was compiled, just 10 percent of bosses said they planned to shrink employee ranks.

More than six in 10 owners said they would keep their workforce steady, while 17 percent said they intended to boost hiring. That's down from the 20 percent of bosses who said the same in July.

On the Gallup index, the difference between the companies that plan to raise head count and those that will lower it resulted in a score of -4. A score of 0 indicates equal percentages of businesses planning to increase and decrease hiring.

Historically, according to Gallup, the index tends to show a positive figure, even reaching double digits during good economic years. But a number of factors — including the looming "fiscal cliff," the effects of Hurricane Sandy and the recent election results — could be stoking Main Street's pessimism.

Such a sour forecast suggests "the potential for a serious decline in jobs early next year," according to Gallup, as well as capital spending reductions down the line.

More than a quarter of small business owners said they have cut back on the number of employees they have in the last 12 months, up from 21 percent who said the same in July and reaching the highest level in two years.

Just 14 percent of bosses said they increased head count.



















 



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