Despite being flush with cash, U.S. businesses have curtailed or even cut back on buying equipment, increasing operations, and hiring staff—the necessary steps to expanding the economy.
The majority of small or middle-sized U.S. companies blame their attitude and lack of enthusiasm on the lack of verifiable evidence of economic expansion, and surprisingly, not on the scarcity of bank loans.
“Small businesses and middle-market companies put the brakes on growth-oriented investments last year and are sending mixed signals about their intentions for the year ahead,” according to a report by Greenwich Associates, a market research enterprise.
Close to half of all small businesses and more than one-third of medium-sized firms decreased overall spending toward expansion, upgrading, or modernizing during the past year. Going into 2011, enthusiasm for increased spending is at an all-time low.
Investments in new or additional equipment were curbed in 2010, and 2011 will most likely be known as another year of depressed spending habits.
“Our research suggests that the prolonged economic slump has reached the point at which many companies have decided to keep new investments on hold—regardless of the availability of credit,” said Greenwich consultant Chris McDonnell in a statement.
Yet, it is not all doom and gloom on the small-business front. About one-third of all small-business owners will hire one or more people next year, almost 10 percent more than the number of companies this year. About 14 percent more middle-sized companies will hire more employees in 2011 than 2010, although there was no speculation on how many people would be helped off the unemployment line.
The majority of small or middle-sized U.S. companies blame their attitude and lack of enthusiasm on the lack of verifiable evidence of economic expansion, and surprisingly, not on the scarcity of bank loans.
“Small businesses and middle-market companies put the brakes on growth-oriented investments last year and are sending mixed signals about their intentions for the year ahead,” according to a report by Greenwich Associates, a market research enterprise.
Close to half of all small businesses and more than one-third of medium-sized firms decreased overall spending toward expansion, upgrading, or modernizing during the past year. Going into 2011, enthusiasm for increased spending is at an all-time low.
Investments in new or additional equipment were curbed in 2010, and 2011 will most likely be known as another year of depressed spending habits.
“Our research suggests that the prolonged economic slump has reached the point at which many companies have decided to keep new investments on hold—regardless of the availability of credit,” said Greenwich consultant Chris McDonnell in a statement.
Yet, it is not all doom and gloom on the small-business front. About one-third of all small-business owners will hire one or more people next year, almost 10 percent more than the number of companies this year. About 14 percent more middle-sized companies will hire more employees in 2011 than 2010, although there was no speculation on how many people would be helped off the unemployment line.
