Small businesses are naturally optimistic—you have to be to own a small business—but Washington has to deliver. That’s one takeaway from the new U.S. Chamber and MetLife Small Business Index.
One thousand companies with 500 or fewer workers were surveyed, asking them to rate the health of national and local economies, whether they’ll be investing or hiring more, and future sales expectations.
Crunching all the numbers, the Index came up with a score of 60.6—a generally positive outlook. Roughly speaking, it means 60.6% of businesses view the economy through a positive lens.
On the plus side, the U.S. Chamber’s J.D. Harrison writes, small business owners are confident about the health of their companies. The Index found "that 60 percent expect their company’s revenue to increase next year and 29 percent are planning to increase their headcount, compared to just 9 percent and 6 percent who expect to see those numbers decline, respectively. In addition, those planning to increase their investments in their companies next year outnumber those planning to pull back."
However, there are some warning signs policymakers should make note of. For instance, their views of both the national and local economies are mixed, writes, Harrison:
A quarter of respondents described the current health of the American economy as somewhat or very poor, while only a third described it as somewhat or very good. Owners offered only a slightly more positive take on their local economies, with 42 percent giving a thumbs up and 22 percent giving a thumbs down.
“Even though the economy has been somewhat stagnant, I am cautiously optimistic,” one small business owner in South Carolina said. Another in Kentucky echoed the same sentiment, adding: “The overall U.S. economy has not grown like we would have hoped from a major recession. I am cautiously optimistic.” A third in New Jersey added: “My business is pretty healthy. It’s not fantastic, but it’s pretty healthy.”
Going into 2017 with Republicans in control of both the White House and both houses of Congress, businesses of all sizes had a positive outlook that Washington would get a move on pro-growth policies to fire up our sluggish economy.
March’s U.S. Chamber/RSM Middle Market Business Index showed the outlook of middle-sized businesses accelerating to its highest level recorded. And the Business Roundtable’s CEO Economic Survey of large companies in the first quarter of this year also saw an upswing in optimism.
If Washington makes some good strides over the next few months on critical issues like infrastructure, comprehensive tax reform, and regulatory reform, businesses—especially small businesses--could turn its confidence into more investment and jobs, higher wages, and stronger economic growth.
About the authors
Sean Hackbarth
Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.
