Small business owners’ view of the economy is surging and giving them an incentive to hire.
That’s the finding of surveys released last week by the National Small Business Association (NSBA) and the National Federation of Independent Business (NFIB).
The number of owners who believe the economy is doing better than it was six months ago has virtually doubled from a survey released during the summer, according to the NSBA survey. Forty-three percent of the 1,426 owners questioned had a more upbeat assessment, compared to 22% in the summer.
The survey is in line with others showing owners more upbeat after the election and at the start of 2017.
Looking ahead, 54% expect the economy to grow during the next year, up from 29%.
The more upbeat view is a reason for owners to add jobs, a shift from the recession and its aftermath, when owners said hiring was too much of a risk. Forty-three percent of the owners surveyed by the NSBA said they expect to hire in the next 12 months, up from 33%.
Owners didn’t show the same surge in optimism but still felt good about their own companies. Eighty percent said they were very or somewhat confident about the future of their businesses, up from 72%. Two-thirds forecast their revenue will increase in the next year, up from 57%. The fact that there wasn’t a more significant gain from the previous survey isn’t surprising — business owners have stayed more confident about their own companies than the larger economy.
The survey was conducted from mid-January through early February.
The NFIB also saw an increase in optimism during January, extending a trend that began in October. Its Small Business Optimism Index rose 0.1 point to 105.9, the highest level since December 2004. Since the start of October, the index is up 11.8 points. The index was compiled from a survey of 1,874 NFIB members.
The index rose although the number of owners who expect their sales to increase fell 2 percentage points to 29%. However, the number of owners who plan to hire rose 2 points to 18%, and the number that believe this is a good time to expand rose 2 points to 25%.
The NFIB survey was conducted throughout January.
An American Express survey released last week also found owners to be upbeat. Fifty-four percent of small and mid-sized businesses said they were optimistic about how well the global economy will fare over the next 12 months, and 59% were optimistic about their local economies.
Nearly 70% said they expect their revenue to grow by at least 4% over the same period, and 42% expect revenue to rise by at least 8%.
The survey questioned 300 owners and executives at small and mid-sized companies.