Small business optimism dips for third quarter
BUSINESS RECORD STAFF Dec 8, 2015 | 4:52 pm
1 min read time
310 wordsAll Latest News, Retail and BusinessAfter positive sentiments reached a seven-year high in January, small business owners are feeling less optimistic today than they were a year ago, according to the latest Wells Fargo/Gallup Small Business Index.
In the quarterly small business survey, which measures small business owner optimism and was conducted Nov. 9, the overall index score dipped from 59 in August to 54 in November, the lowest score since July 2014.
It’s also the third quarter in a row that the score has dropped. The index started the year at 71. A major contributor to this year’s decline is a drop in the number of business owners reporting increases in company revenue. This quarter’s score also was driven by a combination of incremental declines in business owners’ perceptions of their financial situation, capital spending and hiring.
“This has been an unusually slow economic recovery for everyone, and small business owners are certainly feeling that,” said Mark Vitner, managing director and senior economist for Wells Fargo Securities. “With the economy growing as slowly as it has been, it’s been difficult for many business owners to increase their sales, and this has been particularly burdensome for firms who have seen expenses rise, including health care costs.
“As a result, many have been reluctant to invest in equipment, expand their operations and hire staff, even as business owners in general have seen gradual improvement in their financial situation and cash flow over the last few years.”
Thirty-nine percent of small business owners reported that their company’s revenues increased in the last 12 months, which is a 10 percentage point drop from the first-quarter survey. Looking ahead, 47 percent of business owners expect their revenues to increase in the next 12 months, compared with 55 percent at the start of the year.
Most other index measures had small declines or saw no improvements in the fourth-quarter survey.
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