Small business owner sentiment improved considerably last month, according to a new report from Wells Fargo and Gallup. Specifically, the duo’s small business optimism index surged to 80.0 in November, the highest reading since January 2008 and the largest quarterly increase in a year. Essentially all of the headline gain last month was due to a sharp rise in owners' confidence about future business conditions, with 45 percent of survey respondents now expecting a more favorable operating environment in 2017. A majority (58 percent) of owners anticipate that their business's revenue will increase “a little” or “a lot” during the next 12 months, up markedly from 48 percent in the July survey, and 70 percent of owners project “somewhat” or “very good” cash flow in 2017. Unsurprisingly, the brighter business outlook is being accompanied by an uptick in owners' hiring and capital spending plans, with the former jumping to the highest level on record in November. The results of the election were also a major factor behind last month's broad improvement in sentiment, and surveyed small business owners said that the incoming administration could provide some help by reducing and simplifying taxes, and generally supporting economic growth in America. Sixty-one percent of respondents are confident that the new President will focus on the issues important to them as small business owners, and roughly half (51 percent) believe that their company will be better off as a result of the actions taken by both the President and Congress in 2017.
Sources: Wells Fargo, GallupPost author: Charles Couch