The recession may be officially over, but many small business owners don’t see it that way.
The National Bureau of Economic Research (NBER) announced yesterday (Sept. 20) that the U.S. economy hit rock bottom in June 2009 and has been on the rebound ever since.
“The trough marks the end of the recession that began in December 2007 and the beginning of an expansion,” the NBER said in a statement released yesterday (Sept. 20). “The recession lasted 18 months, which makes it the longest of any recession since World War II.”
The NBER was careful to say that economic conditions since that month have not been entirely favorable and conceded that the economy has not yet returned to operating at normal capacity. That's an understatment, according to a majority small business owners.
“The recession is definitely not over. At least not in my neck of the woods,” said Brian Horan, a real estate broker in Torrance, Calif. “Almost all of the real estate transactions I am involved with have to do with distressed properties.”
Horan said bank lending is so tight that both home sellers and buyers are giving up.
“This affects so many people, not just in my industry, and there is a trickle down affect on spending,” Horan told BusinessNewsDaily.
Small business owners in some industries see the recession in the rearview mirror but others see the road to recovery as rocky at best.
Tough road ahead
"Whether the recession feels like it's over or not depends upon the sectors of the economy in which you operate,” said George F. Brown, Jr., co-founder of Evanston, Ill.-based business-strategy consulting firm Blue Canyon Partners.
“For those in manufacturing, and small businesses selling to manufacturing firms, the recession has been over for some time. But other sectors, like construction, are still experiencing difficult times, as are the small businesses that sell to construction customers," Brown said.
Julie Austin, owner of a wrist-worn sports-water bottle company called Hydrosport, agreed the recession is far from over.
“No way is the recession over,” Austin said. “I was just at a national trade show for the retail industry and the place was a ghost town. [It was] very scary. Three years ago it was booming.”
“In Los Angeles, where I live, unemployment is extremely high and every other office building is vacant. In my opinion, it's not even close to being over.”
Not everyone, however, believes the outlook is entirely bleak.
Barry Maher, a speaker and trainer who works medium- and large-size businesses – Hewlett-Packard, Canon, Cessna and Merck to name a few – said things are slowly starting to turn around for his small business.
“I'm a speaker and a trainer and that's one of the first things businesses cut back on when times get tough,” Maher said. “And like all speakers, I experienced a significant drop in business during the recession . However towards the end of 2009, things started slowly coming back. And since then it's gotten stronger and stronger. Last week I probably got more speaking inquiries than I've ever received in a single week.”
Other business owners suggest there’s a fear factor at work.
"I find that many businesses have money; they’re just afraid to spend it," said Kevin A. Mercuri, President & Founder, Propheta Communications in New York.
“Our business is certainly on an upward swing, but it's an awkward arc: our sales pipeline is full of real prospects who have expressed a strong interest in working with us," said Mercuri. "The challenge is to get them to actually sign on the dotted line. Timing - and how you frame it - is everything.”
“We’re in an odd state of business limbo,” he said. “The recession’s over, but the Great Recovery has yet to happen.”