Optimism among small-business owners reached its highest point in the 15-year history of the Wells Fargo/Gallup Small Business Index last quarter, according to the latest round of polling.
The poll, conducted from July 11 to July 18, measured small-business owners’ optimism based on their “overall financial situation, revenue, cash flow, capital spending, number of jobs and ease of getting credit” and found an overall index score of 118, twelve points higher than the previous quarter and the highest in the poll’s history.
“Small-business owners continue to feel confident about their businesses’ current and future financial situation as the economy continues to show positive growth,” said Andy Rowe, Wells Fargo’s head of customer segments. “We are hopeful the unprecedented optimism among business owners will translate into an increase in business investments, and more Main Street small-business growth.”
In a reflection of the tightening labor market, business owners named hiring as their top challenge for the coming year, and 26 percent of them said the number of jobs at their firm has increased in the last year. The number of firms that saw an increase in available positions, up from 24 percent last quarter, is the highest in the history of the poll.
Much of the overall optimism appears to be driven by an encouraging financial environment: 78 percent of the 604 business owners rated their current financial situation as “very or somewhat good,” a five-point increase over the second quarter of 2018. Credit availability also factored heavily into the overall economic optimism, as 49 percent of respondents said it would be “very or somewhat easy” to secure credit in the coming year.
The findings come after the U.S. economy grew at a strong 4.1 percent rate over the second quarter, nearly doubling the average growth rate that prevailed from the final quarter of 2012 to the first quarter of 2018.