Small business economic conditions continue improvement in third quarter

GDP growth of 3.7 percent marks 12th consecutive quarterly increase

[NOV. 23, 2004]  WASHINGTON -- Economic conditions for small business continued to improve in the third quarter of 2004, according to the recently released "Quarterly Indicators: The Economy and Small Business." The report, issued by the Office of Advocacy, shows real gross domestic product up 3.7 percent, the 12th consecutive quarterly increase.

"The economic conditions faced by small business are getting better and better," said Dr. Chad Moutray, chief economist for the Office of Advocacy. "More than 300,000 new jobs were created in the third quarter. Since most new jobs are created by small business, this signals continued growth for small firms in the months to come."

This third in a new series of quarterly reports uses a variety of sources to track current economic conditions for small business. A number of indicators are showing signs of positive change. Between the third quarters of 2003 and 2004, industrial production, real gross private fixed investment and real exports all increased substantially. Growth in each indicator was up from the growth over the same period in 2002-2003.

Over the first three quarters of the year, the net percentage of small-business owners planning to expand employment was at its highest annual level since 2000, at 14.7 percent -- meaning that 14.7 percent more owners plan to hire than plan to cut back on employment. The unemployment rate fell to 5.4 percent in September, its lowest level since October 2001.

The Office of Advocacy, the "small-business watchdog" of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress and the president. It is the source for small business statistics presented in user-friendly formats, and it funds research into issues related to small business.

Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration is an independent voice within the federal government. Appointed by the president and confirmed by the U.S. Senate, the chief counsel for advocacy directs the office. The chief counsel advances the views, concerns and interests of small business before Congress, the White House, federal agencies, federal courts and state policy-makers. Economic research, policy analyses and small business outreach help identify issues of concern. Regional advocates and an office in Washington, D.C., support the chief counsel's efforts.

For more information on the Office of Advocacy, visit www.sba.gov/advo or call [phone].

[John McDowell, press secretary, Office of Advocacy, U.S. Small Business Administration]

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