Survey: Small business optimism ebbing in US
Optimism among American small business owners is showing more signs of ebbing.
That’s one of the findings of a semiannual survey of owners released by Bank of America. Forty-eight per cent of the 1,504 owners surveyed predicted that the national economy will improve over the next year, down from 55 per cent in the survey taken last fall. The drop in optimism extends to owners’ view of their local economies — 51 per cent expect an improvement versus 54 per cent in the previous survey.
The latest survey, conducted in February, is in line with surveys taken earlier this year by Capital One, the US Chamber of Commerce and MetLife and Wells Fargo that showed small business optimism slipping along with expectations for the economy.
The creeping pessimism was also reflected in owners’ modestly scaled-back plans to expand. Sixty-seven per cent of the owners Bank of America surveyed said they planned to expand their companies in the year ahead, down from 69 per cent in a survey taken a year earlier. And 56 per cent said they planned to expand over the next five years, down from 60 per cent a year earlier.
The number of owners who plan to hire increased to 24 per cent from 22 per cent a year earlier. However, the number of owners surveyed by Bank of America who plan to create jobs is smaller than in other surveys.
Owners’ pessimism may be fueled by concerns about the United States’ political environment. It was cited by nearly two-thirds of the owners as one of their top economic concerns, surpassed only by healthcare costs. Rising interest rates, the stock market’s recent volatility and consumer spending were all cited as economic concerns by nearly half the owners.
Owners may also be a little less optimistic because the new tax law has not given their companies the boost they expected. Twenty-eight per cent said the government’s new tax policy has been positive for their companies, compared to 45 per cent who had a positive outlook about tax policy a year earlier. Half said the tax policy was neutral for their businesses, up from 39 per cent who, a year ago, forecast a neutral impact, and 21 per cent said the tax policy has had a negative impact on their companies, up from last year’s 15 per cent.