First-Half 2010 in Review

By Carol Tice

It sneaks up on you, doesn't it? Half of 2010 is already behind us. For small business, the first half has been a mixed bag.

A new report from private-company research firm Sageworks shows small-business sales stayed down so far in '10, even a bit farther down than in '09. If you make zero the sales level in late fall '08, when the downturn really got serious, sales were down more than 6 percent from there.

The interesting part: Net profits stayed the same, at an average of around 6 percent. That to me indicates serious cost-cutting going on, to maintain those margins as businesses de-leverage their fixed costs due to lower sales. But profits are still there.

There are many signs that the U.S. economy is improving, whip-sawing stock market notwithstanding. Cargo volume snapped a two-and-a-half year streak of declines back in January, and retail container traffic is rising again. More retailers ordering more stuff means their sales are improving.

Big retail seems to have done better than small business. The U.S. Census figures show retail sales went up year-over-year every month since last November. The gain isn't huge though, and the National Retail Federation forecast sales will rise just 2.5 percent this year overall.

In the restaurant industry, hiring is improving, People Report Workforce Index reported earlier this month. More than 40 percent of operators said they expect to add hourly workers in the back half of this year, while just 5 percent planned layoffs. The study showed hiring accelerating in the remainder of the year.

Many consider the restaurant sector to be a leading indicator of economic improvement. Apparently, we don't eat out when we're worried about money, but at the first glimmer of optimism, off we go to treat ourselves to a restaurant meal.

There are still worries on the horizon that the economy could head back down, which the whip-sawing stock markets reflect. Some observers are fretting about the end of federal stimulus money, which is generally winding down. But there's hope even there, as Congress is acting to extend unemployment benefits again, the end of which concerned many. Financial turmoil abroad is also a potential problem that could ripple back to us in the States.

Personally, I think the economy is picking up and there's no turning back now. There's just too much entrepreneurial energy out there. You can only keep it down for so long before it's just gotta pop.

What do you think? Will we double-dip, or is the downturn over? Leave a comment and let the BVR Times know.

Photo via Flickr user Tim in Sydney