Survey: Budget Cuts Not Hurting U.S. Businesses

business budget cuts
Gerry Broome/APBusiness owners, such as Tom Raper, owner of Bragg Pawn Shop near Fort Bragg in North Carolina, wonder how budget cuts will effect business. More than 8,500 civilian employees on the military base will be furloughed one day a week starting this month.
NEW YORK -- Washington's budget tightening is having a minimal effect on businesses, a survey of business economists released Monday shows.

The National Association for Business Economics survey asks how higher taxes and lower government spending affected businesses in the first three months of 2013.

Ninety-three percent of respondents say the political developments had no effect on employment levels in the first quarter, and 95 percent say they had no impact on capital spending plans.

Overall, the results paint a picture of businesses feeling better than they were in the fourth quarter, but not as good as they were a year ago.

The NABE did caution, however, that businesses might have already accounted for the higher taxes and lower government spending in the fourth quarter, and adjusted their hiring and spending plans before the end of 2012.

The NABE surveyed a small sample, 58 members, between March 19 and April 2. They represent a variety of sectors, including finance, transportation, health care and manufacturing.

Among the results:
  • Fifty-five percent of respondents reported rising sales -- up from 37 percent in the fourth quarter, but down from 60 percent a year ago.
  • Twenty-nine percent reported rising profit margins -- up from 25 percent in the fourth quarter, but down from 40 percent a year ago.
  • Thirty-one percent said wages and salaries are rising -- up from 27 percent in the fourth quarter, but down from 44 percent a year ago.
The improving quarter hasn't translated into more jobs. Only 22 percent said they added employees. That was down from 25 percent in the fourth quarter, and 28 percent a year ago.

Expectations for the future followed a pattern similar to many of the other results -- better than the fourth quarter, worse than a year ago. Sixty-five percent said they expect the economy to grow by more than 2 percent over the next year, up from 50 percent in the fourth quarter but down from 78 percent a year ago.

Overall, they listed global economic conditions, the possibility of further government spending cuts and the "regulatory environment" as their biggest concerns for the next three months. The services industry, including retail, health care and restaurants, was most concerned with the possibility of further government spending cuts. The finance industry and goods producers, such as manufacturing and construction companies, were most concerned by global economic conditions.

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What business is left to be affected?

April 22 2013 at 1:31 PM Report abuse rate up rate down Reply

This story can't be true - Obama said if we did not give him his way the USA would come crashing down on us.

April 22 2013 at 1:13 PM Report abuse +1 rate up rate down Reply

Every business I work with has been declining since sequestration. (Research, science, aquaculture.) Congress, in their inability/stubbornness to agree on a budget, is crippling this country. But let's talk economics--why should Congress do anything when they get paid, have medical care and pensions for not doing their jobs? Talk about a welfare state!

April 22 2013 at 1:08 PM Report abuse rate up rate down Reply

They certainly didn't survey businesses in the hard hit areas. Many businesses in my area have taken a beating thanks to budget cuts! The media and the government are so out of touch with reality that it's frightening.

April 22 2013 at 11:41 AM Report abuse +1 rate up rate down Reply

The changes to Medicare are putting DME suppliers out of business. Competitive bidding for Oxygen?

April 22 2013 at 11:37 AM Report abuse rate up rate down Reply


April 22 2013 at 11:34 AM Report abuse +1 rate up rate down Reply

This story is confusing because it says things are up a little from last quarter but way down from last year. that just means it's not as bad as last quarter but its still down 60%. I know I didnt spend jack in last quarter beacause I didnt know what the taxes were gonna be. that made me have to catch up a little this quarter but Im back down on my spending again. Inflation is just too expensive

April 22 2013 at 11:27 AM Report abuse +1 rate up rate down Reply

Who writes this crap? Small business are suffering greatly... just like EVERYBODY else except for the politicans who still make their pay PLUS THEIR RAISE that they gave themselves! Where do they get off? Just another example of how out of touch they are in DC!!

April 22 2013 at 10:56 AM Report abuse +3 rate up rate down Reply

quit surveying economists and start surveying small businesses, Last qtr stank. and its still not improving

April 22 2013 at 10:37 AM Report abuse +1 rate up rate down Reply