Annual GDP Growth of 4.4 Percent In 2004
Economic conditions for small business remained strong in the fourth quarter of 2004, according to the Office of Advocacy's newly released Quarterly Indicators: The Economy And Small Business. The report shows real gross domestic product (GDP) up 3.1 percent in the quarter and up 4.4 percent for the year.
"Economic conditions for small business continued to be strong in the fourth quarter of 2004," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. "And for the year, GDP growth of 4.4 percent is good news for small business. In the fourth quarter alone businesses added over 600,000 net new jobs. The outlook for the small business economy remains bright."
A number of indicators are showing signs of positive change. Americans were more optimistic in the fourth quarter, according to both the National Federation of Independent Business's Optimism Index and the University of Michigan's Consumer Sentiment Survey. For the year, the economy added 2.2 million nonfarm payroll jobs, 606,000 in the fourth quarter.
Credit markets also worked in favor of small business. According to the Senior Loan Officers Survey, small business demand for commercial and industrial loans remained strong; a quarter of all respondents continued to ease rather than tighten lending standards. Moreover, in 2004 $2 billion more was invested in venture capital deals than in 2003, according to the National Venture Capital Association; $5.3 billion was invested during the fourth quarter.
The Office of Advocacy, the "small business watchdog" of the 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.
The Quarterly Indictors series, which started in the first quarter of 2004, is available on the Office of Advocacy web site at www.sba.gov/advo/research/sbei.html.
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