Small businesses important for US economy

When it comes to doing business bigger isn’t always better. Small businesses are a huge component of the US economy.

But new figures show they’re not immune from recent trends.

When it comes to US businesses small is big.

Firms with fewer than 20 employees generate about half of the nation’s gross domestic product.

And figures compiled by the National Federation of Independent Businesses show these firms create more than 60 percent of the new jobs in the US.

But according to a new NFIB survey, small businesses in America are feeling the pain from a slowing economy.

That’s translating into fewer jobs being created. And just 12 percent of small business owners say they’re going to add new workers in the near future.

Why are they cutting back on hiring?

Twenty-eight percent of small businesses owners say they’ve seen their sales drop in the past few months.

Also, rising wages are adding to the squeeze they’re feeling.

While things are tough for small businesses right now, economists expect economic growth to pick up by the end of 2007.