Contribution of Small Businesses to US GDP in Q4 2009

GDP report of U.S. Shows the economy is growing very fast over the years, but the small businesses are still lagging.

According to government data, U.S. 2009 fourth-quarter GDP grew 5.6 percent, the fastest pace since 2003.

According to Drew White, Sageworks’s chief financial officer, the survey results represent “tens-to-hundreds of thousands” of U.S. privately-held companies which showed a marked decline in 2009 revenues.

According to White small private businesses with less than $10 million in annual reported revenues, were down 6.4 percent which was a significant decline from the previous year, when 2008 fourth-quarter sales increased 2.4 percent. An increase of 5 percent was showed Pre-recessionary 2007.

A nominal increase in consumer spending of 1.6 percent was shown by the government’s GDP numbers for Q4 2009, which decreased to 2.8 percent in the third quarter.

As per White, normally one would expect consumers to pull the small businesses out of recessions and consumers would have a direct and immediate impact on small businesses, but it will be slow because of unemployment.