U.S. small business owners are more optimistic about business than they have been in the last decade, according to the latest Wells Fargo/Gallup Small Business Index. Small-business optimism has been on the rise since the 2016 presidential election, and in spite of the Trump administration’s inability to pass tax or health care reform legislation at the time of this survey, business owners still reported record levels of hope for the future.
The Index, which has been conducted quarterly since 2003, reached 106 in July; the score stood at 68 this time last year. Consisting of owners’ ratings of their current business situation and their expectations for the next year, the Index is measured by business owners’ responses to 12 items, including their overall financial situations, revenue, cash flow, capital spending, number of jobs, and ease of getting credit. This month’s uptick was measured mostly across the board, indicating that the optimism reflects general positivity as opposed to renewed optimism about one specific aspect of business.
The increased optimism comes at a time when stock market indexes have reached record highs and unemployment is low. Reports also indicate that the demand to buy small businesses is strong. Historically, small business owners have been more positive about the future than their current circumstances, but the overall increase in the Index this quarter is a result of an increase in the present situation score. Business owners are more than hopeful; they’re positive about the here and now.
When it comes to the top challenges facing their businesses, small business owners continue to mention issues relating to government policies, particularly regulations and taxes, as well as economic and financial situations, marketing and attracting new customers, and hiring good employees. While previous respondents to the survey said they hoped the new presidential administration would help them address these concerns, the trend data show that government is still small business owners’ greatest challenge.