SAN FRANCISCO — Visa USA remains optimistic about small business spending even as some economic experts have taken on a more cautious tone about the sector. The card brand has made moving business spending onto cards one of its key strategic goals.
Speaking at a Microsoft Small Business Summit, Wayne Best, senior vice president with Visa, struck a note of cautious optimism in his keynote presentation at the Microsoft Small Business Summit, based on his analysis of macroeconomic trends, Visa spending data and small business studies.
He recounted that macroeconomic data compiled and analyzed by Visa USA provided a mixed outlook. Although gross domestic product was robust in 2006, Best expected to see lower consumer spending growth, or personal consumption expenditures, in the coming year. PCE growth is forecast to rise at 4.9% in 2007, down from 6% in 2006.
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"The trend of lower PCE growth is driven by weaknesses in the housing market, which is pushing down mortgage equity withdrawals," said Best. "While the economy may slow, the common denominator with the past will still be the resilience of consumer spending. Consumers will continue to take the lead in driving economic growth, with consumer spending representing 70% of our economy."
Despite the divergent economic indicators, Best said small businesses remain bullish on the future, and he attributed continued optimism to relatively low interest rates and a stronger job market. Meanwhile, taxes and the cost/availability of insurance are the two most pressing concerns for small businesses, followed by the tight labor market, he said.
Unsurprisingly, Best recommended small business owners, to help weather the shifting times, improve cash flow management–in part by starting to use payment cards.
"Business owners should look at payment solutions, such as payment cards, that allow them to time cash outlays and reduce the headaches associated with managing account receivables," Best said.
He also recommended small businesses adapt to the tight labor market and refrain from taking long term leases.
"Small business owners are at the forefront of the U.S. business landscape and therefore are excellent barometers of our economic health," Best said. "While economic indicators point to a slowdown in the economy, small business owners, who are the engine of our economy and are natural innovators and optimists, clearly see the glass as half full, rather than half empty." –[email protected]
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