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Savannah's small businesses are keeping pace with 2003, location inquiries ahead for city's greater downtown.

Things have started to quiet down at Polks Produce and Plants on Liberty Street after a busy summer.
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Owner Diane Polk says that people are now tired of planting summer flowers or shelling peas.

"And the mums haven't come in yet," she mused.

It was a good summer, and chrysanthemums will be arriving soon.

That jibes with a new report by the U.S. Small Business Administration that economic conditions for small businesses improved in the second quarter this year.

According to the report, issued by the Office of Advocacy, income increased at a yearly rate of 14.8 percent.

Also, interest rates remain low, with the rate for small business loans of less than $100,000 averaging 4.2 percent. And worker productivity stayed strong with a 4.6 percent increase in nonfarm business output per hour.

Chief Economist Chad Moutray said small businesses make up almost 99 percent of employers in the United States, so it's a macro-economic issue.

"As goes the economy, so goes small business," he said. "Or the other way around. Some way small business is what is leading the United States out of the slow-down."

Michael Alter, president of SurePayroll, an Illinois-based online payroll service for small businesses, agrees things are good for small businesses because they're hiring.

But he's not as sure that employees are doing as well.

"Small businesses aren't saying 'We're making great margins,'" he said. "But they're growing and are able to grow by paying less."

Alter thinks that the threat of outsourcing is instrumental in holding pay down.

"As the number of jobs goes up, that generally results in a limited supply and usually means higher salaries," he said. "But now the threat of the job going to India or China has people accepting less."

Locally, Savannah Development and Renewal Authority Executive Director Lise Sundrla thinks things have picked up for small business. "It's been a steady year," she said. "With a lot of public and private investment."

Around 20 new businesses have opened in the Broughton Street Urban Redevelopment, roughly on pace with 2003. And interest in the form of business enquiries is up.

The authority received 91 business enquiries for information on greater downtown and another 69 for Martin Luther King Jr. Boulevard and Montgomery Street in the first six months of the year.

Tony O'Reilly, president of the Savannah Small Business Assistance Corp. said loan volumes were currently ahead of last year, while delinquencies are down.

"That's a general indicator that things are OK," he said. "Although I'm not sure we're at a boom yet."

Local architect Patrick Shay said Savannah was a good place for small business this year.

His firm, Gunn Meyerhoff Shay Architects, has a backlog of projects and enough work that he knows what he'll be doing in the next five to six months.

"And that's a good place for a small business to be," he said.

Small firms:

- Represent 99.7 percent of all employers.

- Employ half of all private sector employees.

- Pay 44.3 percent of total U.S. private payroll.

- Generated 60 to 80 percent of net new jobs annually over the last decade.

Copyright © 2004. Savannah Morning News.