The Index’s future expectations component (forward looking 12 months) rose to positive 21 (+21) in January, an increase of 13 points from the survey’s last reading, which occurred in
- Revenues – 49% expect revenues to increase a lot or a little, up from 37% in Q4 2011
- Overall financial situation – 63% expect their company’s financial situation to be very or somewhat good over the next 12 months, up from 55% in Q4 2011
- Hiring – 22% expect the number of jobs at their company to increase a lot or a little, up from 15% in Q4 2011; 8% expect the number of jobs at their company to decrease a lot or a little, down from 13% in Q4 2011
- Cash flow – 53% expect their cash flow to be very or somewhat good, up from 48% in Q4 2011
- Credit access – 27% expect credit to be very or somewhat easy to obtain, up from 22% in Q4 2011; 38% expect credit to be very or somewhat difficult to obtain, down from 43% in Q4 2011
In addition to its future expectations component, the Index includes a present situation component (looking back 12 months), which improved to minus 6 (-6) in January, up from minus 11 (-11) in Q4, 2011 and the best reading in this component in three years. Driving this improvement was an increase in business owners who experienced increased revenues (33 percent), ease of accessing credit (25 percent) and increased capital spending (24 percent) over the past 12 months.
“January’s increase in optimism signals that small business owners are seeing a brighter future,” said
Index Scores: Q1 2011 – Q1 2012
|Overall Index Score||Present Situation||Future Expectations|
| Q1 2012
| Q4 2011
| Q3 2011
| Q2 2011
| Q1 2011
The overall Index can range from -400 (the most negative score possible) to +400 (the most positive score possible), but in practice spans a much more limited range. The highest reading in the history of the Index is 114 recorded in
Employment by small businesses poised to grow
More small business owners expect to add new employees (22 percent) than expect to let them go (8 percent) over the next 12 months, an improvement over the previous survey readings. This quarter’s 14 percentage point hiring/firing difference (those who expect to hire versus fire employees) is the largest since
More than half of the survey’s small business owners (52 percent) said they hired employees in the past 12 months, which is little changed from the 51 percent reported in
While business owners indicate plans to hire in the next 12 months, they demonstrate some concern around hiring today. Only 15 percent said they are currently looking for new employees. Those who are not looking to hire employees today (85 percent) were asked why not. Key reasons given include:
- Don’t need any additional employees at this time (76 percent)
- Worried revenues or sales won’t justify adding more employees (71 percent)
- Worried about the current status of the U.S. economy (66 percent)
- Worried about cash flow or ability to make payroll (53 percent)
- Worried about the potential cost of healthcare (48 percent)
- Worried about new government regulations (46 percent)
Half of all business owners surveyed said that as a general rule, they find it very difficult (21 percent) or somewhat difficult (32 percent) to find the right qualified employees for their business. And, in the event they can’t afford to hire new employees, owners say they most often turn to their spouse (21 percent), a friend (16 percent), their children (15 percent), or a relative other than child or spouse (11 percent) for unpaid help.
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About the Small Business Index
For more than 70 years, Gallup has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.
Note: Complete survey results available upon request or by visiting www.wellsfargobusinessinsights.com/small-business-index.
|Copyright:||Copyright Business Wire 2012|
|Source:||Business Wire, Inc.|