Small Business Optimism Reaches Highest Levels Since Recession
Small business optimism is the highest it has been since Q3/08, according to the latest Wells Fargo/Gallup Small Business Index conducted July 22-26.
The Wells Fargo/Gallup Small Business Index improved 9 points since second quarter and 36 points since Q4/12, to a positive 25 (+25). A major driver of this improvement is business owner optimism around availability of credit now and in the future. While it’s well below pre-recession levels, the Index score is the highest it has been in five years. In August, the Index marks its tenth anniversary of measuring U.S. small business owner perceptions of the economy and business impact.
“For ten years, the Small Business Index has taken the pulse of small business owners in America,” said Doug Case, Wells Fargo small business segment manager. “The survey has shown a slow and uneven recovery for small businesses, and this quarter we continue to see business owners express cautious optimism as economic trends improve, such as a strengthening housing market.”
Access to Credit
Small business owners said they feel more optimistic about their ability to access credit over the next year. In the survey, 28% of small business owners said they expect credit to be very or somewhat easy to obtain in the next 12 months, up from 24% in Q2/13 and the highest percentage since 2009. Thirty percent said they expect credit to be difficult to obtain in the next 12 months – down significantly from the 36% recorded last quarter and the lowest this measure has been in five years.
In the most recent survey, 25% of small business owners reported an increase in capital spending in the past 12 months. Additionally 26% of business owners said they are planning to increase spending in the next 12 months, consistent with last quarter’s results. The number one reason business owners cited for not making a capital investment was continued concern about the overall state of the economy (64%) followed by uncertainty in the future of their business (57%).
To download the complete Q3 Small Business Index Survey Results click here.