Small-business owners’ optimism improved to its highest level in eight years after Republican Donald Trump won the presidential election.
Gallup reports the latest Wells Fargo/Gallup Small Business Index, which measures the optimism of small-business owners, increased 12 points from mid-July and was at 80 as of mid-November. That’s the highest reading since January 2008, when the index was at 83.
Increases in small-business owners’ optimism about the future, rather than their opinions of their present situations, are largely behind the increases in the overall index. Many of their assessments of their present expectations are actually down a little, while future expectations rose on all six components of the index—which includes overall financial situation, revenue, cash flow, capital spending, number of jobs and ease of getting credit.
Aside from the index, the latest survey finds small-business owners feeling relatively upbeat about both their businesses’ operating environment in 2017 and their businesses’ future. Among the survey findings:
- The percentage of small-business owners expecting company revenues to increase over the next 12 months rose from 48% in the third quarter to 58% in the latest survey.
- Similarly, cash flow expectations are up slightly, from 65% to 70%.
- Owners’ view of future capital spending is also higher, with 35% in the current survey expecting to increase spending compared with 25% in the third quarter.
- Expectations about adding jobs rose from 21% in the third quarter to 36% in the fourth quarter.
- Ease of obtaining credit is also up, from 37% in the third quarter to 44% in the latest survey.
- When asked if they expect their business to be better or worse off in 2017 compared with 2016, 46% of small-business owners—up from 30% two years ago—are optimistic. Less than 20% of small-business owners are pessimistic in their business outlook.
The survey results are based on telephone interviews with 602 U.S. small-business owners in all 50 states, conducted over a seven-day period ending Nov. 17. The margin of error is 4 percentage points. Read the full story and see the complete survey results.
