According to several recent surveys, small business optimism surged in July and August to some of the highest levels since the recession. Here is a look at some of the specific numbers that have been recently released:
- The Wall Street Journal/Vistage Small Business CEO Survey supports this confidence surge with specific metrics, rating the “confidence index” at a high of 104.2 in August, which is up from 102.2 in July and from 93.7 in August of the previous year (2012). In addition, of the 678 business owners who were surveyed, 73 percent expected revenues to increase in the next year and 54 percent expected profitability to improve, which are the highest levels for this particular metric since the survey was first launched in June 2012.
- A quarterly small business optimism index released from Wells Fargo and Gallup reached its highest level since the third quarter of 2008.
- A similar index released by the National Federation of Independent Business in August had its fourth highest reading since December 2007.
This optimism data hasn’t been accepted across the board by economists. In fact, some argue that other small business measurements such as expansion and demand for capital are lower than normal at the present time. Additionally, while these small business confidence numbers are higher than they have been in years, they are still well under pre-recession confidence levels (that have been tracked over the past 35 years). It’s also important to note that in terms of the overall economic outlook, it continues to improve but is still far from robust. Unemployment continues to hover above 7 percent and gross domestic product growth is still far behind the long run average of 3.5 percent.
While small business hiring has lagged behind in the overall recovery, there are still some signs that it has been picking up in the past couple of months. For instance, in the Wall Street Journal/Vistage survey (fielded online between August 12 and 21), around 50 percent of small business owners said that they expect to increase their hiring in the next 12 months (compared to 40 percent who said in November 2012 that they planned to hire).
Janofsky, Adam. “New Flash of Optimism for Small-Business Owners.” The Wall Street Journal. 8/28/13.