Small-business owners across the United States began 2018 feeling very positive about the overall economy and outlook for their businesses, according to results from the Wells Fargo/Gallup Small Business Index released today. The survey, taken just after the beginning of the year, came on the heels of a solid shopping season and a very strong fourth quarter, Wells Fargo Senior Economist Mark Vitner wrote. 

The future expectations series, which reflects how optimistic business owners are about the economy and their business for the coming year, rose 5 points in the first quarter to 65, which is the highest it has been since December 2006. 

Business owners’ assessment of current conditions was little changed, with the present situation series slipping a point to 42 in the first quarter. The slight drop left the present situation series roughly in line with its average for the previous four quarters and well above levels in the years before that.

The continued improvement in small-business confidence is consistent with gains in other major
surveys, including the Conference Board’s Consumer Confidence Index, the Institute for Supply
Management Survey, and various surveys of corporate CEOs and CFOs. 

Vitner said that “a growing proportion of business owners note that the onslaught of regulations seen earlier in the business cycle has either let up or been reversed, and report that sales and finances improved over the past year.” 

One of the more notable gains during the first quarter was in the proportion of firms reporting that their revenues increased in the first quarter, which rose 6 points to 52. The increase brought the series back to its all-time high, last reached in the second quarter of 2007, and that improvement is expected to continue. 

Additionally, the proportion of business owners expecting revenues to increase over the next
12 months jumped 8 points in the first quarter to 66, marking a new series high. “With more business owners expecting sales to rise in 2018, we expect to see further improvement in employment and capital spending,” Vitner said.