SAN FRANCISCO—A new study shares good news for MBL next year, indicating that small business owners are the most optimistic they have been in more than six years, and are feeling the most upbeat about the year ahead since the start of the Great Recession.
The latest Wells Fargo/Gallup Small Business Index survey, conducted Nov. 10 to 14, shows the overall Small Business Index score increased significantly to positive 58 (+58) in November, up from a positive 49 (+49) in July 2014 and up 34 points from a year ago.
While below pre-recession levels, the score, which measures small business optimism, is the highest it has been since January 2008 when it was positive 83 (+83).
The survey’s future expectations score increased to positive 37 (+37) in November up from positive 17 (+17) a year ago. The present situation—how business owners rate current conditions for their businesses—also continues to steadily climb, having increased to positive 21 (+21), up from positive 7 (+7) in fourth quarter of 2013.
Keys to what’s contributing to the improvement:
- Small business owners are feeling better about their company’s financial situation for the year ahead with 71% expecting their overall financial situation to be very or somewhat good over the next 12 months, up from 66% in the third quarter of 2014.
- Hiring is expected to increase over the next 12 months, with 26% of small business owners reporting they plan to increase the number of jobs at their companies a little or a lot, up from 20% in July 2014.
- More business owners plan to make investments in their businesses over the next 12 months as 29% expect to increase the amount of money they allocate for capital spending compared to 25% in the prior quarter.
- Revenue forecasts remain positive over the next 12 months with 51% of small business owners saying they expect their company’s revenues to increase a little or a lot, and just 14% expecting a decrease.
“The latest Index scores show that small business owners are becoming more confident about the future,” said Lisa Stevens, head of regional banking sales and marketing and small business and regional bank executive for the Pacific Midwest region at Wells Fargo. “With steady improvements in the operating environment and the economy, small businesses in general are making great strides, are in a better financial position and are seeing more opportunities to invest in their businesses for the long-term. Positive trends in hiring and stronger cash flows show us that small businesses are healthier and are on much more solid footing as they look toward 2015.”
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