Survey Confirms Economic Pessimism PrevalentAmong South Jersey Small Businesses

Survey Confirms Economic Pessimism Prevalent Among South Jersey Small Businesses

Small Businesses feel impact of economic constraints amid growing frustration with government policies

According to the second annual Southern New Jersey Small Business Survey conducted by the Mangan, Ernst & Rankin Wealth Management Group of Janney Montgomery Scott LLC (MER), while many businesses are experiencing stable or slow growing revenues, the majority (67%) of surveyed small business owners in South Jersey are pessimistic about the economy, with most of those who indicated some level of pessimism (97%) saying it will take at least 12 months for the economy to stabilize.

Although the study finds that the economic recovery from two years ago has continued—in fact, showing that Southern New Jersey has enjoyed a recovery slightly outpacing that of the national economy— due to the continuum of influences directly impacting small businesses, from the rising costs of goods produced and a slow national recovery, to increased per capita costs to comply with recent government mandates, survey respondents confirmed that the prevailing sentiment now is one of growing pessimism.

The state of small business is essentially gridlocked, as reflected in the reality of small businesses hunkering down with limited expansion opportunities and therefore ultimately limited hiring, potentially choking off economic growth. While 92% of businesses surveyed have no plans for a staff reduction in the next 12 months, there has been a less than robust hiring trend, with only 33% increasing staff over the past 12 months, far from the anticipated 75% that reported in 2010 their intention to hire.

“Small businesses are a key driver of Southern New Jersey’s economy, and in our opinion, even a small, incrementally positive change in the nation’s direction — if not a much stronger policy stand directly in tune with the concerns of small businesses —could provide the necessary impetus small business owners need to invest in their firm’s future and the future of the U. S. economy, by investing in plant, equipment and most importantly, personnel,” noted vice president and senior partner, Clark Mangan.

Other key survey findings include:

• 93% of businesses are dealing with increased costs, yet only 37% have increased prices
• 88% of businesses reported increased health care costs
• 34% of business have no plans to increase capital spending in the next 12 months

For more than a decade, Clark Mangan, James Ernst and David Rankin, MER senior partners have supported the Delaware Valley’s business community. MER provides a source of comprehensive guidance, from personal to business financial planning, to examination and clarification of business succession issues, and monetizing of the business, assisting small businesses owners and their families with financial planning and personalized investment advice.

To request a full-length copy of the report, please contact us at 800.613.1327 or by email: merwealth@janney.com.

This is intended for informative purposes only and should not be considered as a representation of Janney Montgomery Scott LLC or the Mangan, Ernst & Rankin Wealth Management Group (MER) as an offer to sell any securities or as a solicitation of an offer to buy any securities. The factual information given herein is taken from sources that the MER Wealth Management Group believes to be reliable, but is not guaranteed as to its accuracy or completeness, and should not be considered as an individualized recommendation or personalized investment advice. The opinions expressed herein are not the opinions of Janney Montgomery Scott LLC or its Research Department and are subject to change without notice in reaction to shifting market conditions. Past performance is no guarantee of future returns.

About The Survey

The largest of its kind to focus on Southern New Jersey exclusively, the second year survey gained insights from 100 small businesses with either a resident headquarters or substantial operations within South Jersey, representing more than $500,000,000 in combined revenue and 2,700-plus employees.

About Janney Montgomery Scott LLC

Established in 1832, Janney Montgomery Scott LLC provides comprehensive financial advice and superior service to individual, corporate and institutional investors. A full-service, financial services firm, Janney is committed to providing our clients advice through a wealth management approach by focusing on the delivery of strategic financial plans that utilize a variety of financial products and services best suited to help meet their financial goals. Janney is equally committed to providing our corporate and institutional clients objective advice for the successful execution of their unique business plans. Janney provides advice and service to clients through a network of professionals in branch offices located along the entire east coast. Janney is an independently operated subsidiary of The Penn Mutual Life Insurance Company, one of the largest mutual insurance companies in the nation, and is a member of the New York Stock Exchange, Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

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