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Wells Fargo: Small Businesses Enter 2016 With More Optimism

Date: Feb 16, 2016 @ 08:01 AM
Filed Under: Economic Reports

Small business owners expressed a level of optimism not seen in a year in the latest Wells Fargo/Gallup Small Business Index, conducted January 11-15, as the Index’s overall score rose to 67, a 13-point gain from November’s survey.

The quarterly survey, which measures the optimism of small business owners, had previously declined for three consecutive quarters, falling to an overall score of 54 in November. The January increase was the largest quarter-over-quarter increase since January 2015, when the Index also rose 13 points.

The bounce in optimism benefitted largely from small business owners feeling better about their cash flow, with 60 percent saying their cash flow was very or somewhat good over the past 12 months – a level not seen since the fourth quarter of 2007. Looking ahead, 66 percent of business owners expect their cash flow to be very or somewhat good in the next 12 months, compared to 63 percent in November. Most other Index measures had small increases or were unchanged in the first-quarter survey.

“The latest Index scores show that small business owners are more upbeat about their current and future business conditions,” said Lisa Stevens, Wells Fargo’s head of small business. “Similar to what we’ve seen in some consumer confidence surveys, improvements reported in the January survey indicate the optimism of small business owners rebounded after trending downward for much of 2015. This suggests small business owners are entering 2016 with greater confidence.”

Also boosting the January Index score was the forward-looking outlook of business owners. Small business owners reported feeling more positive about the next 12 months, as the survey’s future expectations score rose eight points to 41 in January from November’s score of 33. The present situation score – how business owners rate current conditions for their business – also improved, climbing five points to 26 in January from November’s score of 21.

Read the full Wells Fargo/Gallup Small Business Index.

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