Confidence Drops for Small Warehousing, Distribution Companies

NORTHFIELD, Ill.—Confidence of small distribution and wholesale companies plummeted during the fourth quarter of 2007, according to a report released by the Small Business Research Board (SBRB).

The “Distribution and Wholesale Small Business Confidence Index” dropped 10 points (nearly 25%) to 31 from the 41 recorded during the prior quarter. The third-quarter 2007 report was the first wholesale and distribution industry confidence index released by the SBRB.

Concerns about the slowing economy and a reduction in hiring led to declines in two of three major categories comprising the confidence index.

Only 24% of the more than 950 small business owners surveyed said they believed the economy would improve during the next 12 months, which was 13 points fewer than the 37% who expressed optimism during the third quarter.

A mere 15% said they would increase hiring during the coming 12 months. This was 19 points fewer than the 34% who said they had plans for increased hiring when surveyed during the third quarter.

Nevertheless, 54% of the owners and managers participating in the poll said they believe revenues will increase during the next 12 months. This was 2 points more than the 52% who expressed the same opinion during the prior quarter.

The current distribution and wholesale industry confidence index is 2.67 points lower than the 33.67 reported for all U.S. small businesses during the fourth quarter of last year.

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