Executives from midsize and small businesses feel dramatically better about the U.S. economy than a year ago, according to a new report from JPMorgan Chase & Co.

In a dramatic shift from last year, the seventh annual Business Leaders Outlook survey, which closed the day Donald Trump was sworn in as President, recorded increased optimism across the board. According to the report, middle market executives report high expectations for the new administration, and expect improved performance in the global, national and local economies, as well as their own businesses. 

“U.S. companies are gaining confidence, and they anticipate new economic support from Washington in the coming year,” said Jim Glassman, Senior Economist at JPMorgan Chase. “Even some of their top business challenges – managing labor costs and trying to tap a limited supply of talent – are more growing pains than survival tactics.”

Last month Glassman identified seven key trends that are likely to influence economic growth in the coming year, including the normalization of interest rates.

"In December 2015, and again in December 2016, the Federal Reserve hiked interest rates by a quarter point, lifting rates from near-zero. These widely anticipated moves caused very little volatility in markets—interest rates are expected to remain at historically low levels for the foreseeable future, even as the economy makes a full recovery," wrote Glassman, in a JPMorgan Chase blog post. "As always, the Federal Reserve will likely be guided by inflation. All signs indicate modest inflationary pressure in the coming year, and most analysts believe that a gradual process of interest rate normalization should be sufficient to contain rising prices.

Monetary policy is strongly accommodative and there is plenty of room for further growth," he added. "With the US economy poised to return to full strength, interest rate normalization underway and other key central banks following up with their own versions of asset-purchase programs, the dollar has been gaining against major foreign currencies." 

The new report finds that middle market executives are twice as optimistic – 80%, up from 39% – about the U.S. economy than they were last year. Also, 62% of small business owners are bullish about the U.S. economy, up from 43%. Both groups feel even better about their own company’s prospects.

Three quarters of middle market executives, and 61% of small businesses, expect that the new Trump administration will have a positive impact on their business.Primary concerns include reducing regulations and lowering taxes.

Middle market business executives expressed the most optimism in the survey’s seven years:

• Their company: 84%, up 14 points from 2016
• Local economy: 68%, up 18 points
• Global economy: 30%, up 20 points

They see their top business challenges as:

• Revenue/sales growth: 71%, down 3 from 2016
• Managing labor costs: 46%, up 6 points
• Limited supply of talent: 44%, up 4 points

The regulations they are most concerned about are:

• Healthcare: 63%, down 5 points from 2016
• Labor: 44%, up 5 points
• Fiscal policy: 42%, down 6 points

For more information on the 2017 Business Leaders Outlook survey results, click here