I think Wells Fargo and Gallup could have used a Magic Eight Ball to summarize the findings of their most recent Small Business Index Scores: Outlook good. The 2018 Q1 index came in at 106, down merely one point from its decade-high level of 107 notched in the final quarter of 2017.
Some highlights of the survey results released today are:
- 75 percent of small business owners said the economy is on the right track for their businesses to grow,
- 83 percent said their businesses are positioned to take advantage of a strong economy in the next year,
- 57 percent said the national economy has improved over the last year,
- A quarter of business owners said their businesses had benefited a great deal from the improved national economy,
- 59 percent of small business owners said they are very likely or somewhat likely to provide salary or wage increases to their employees over the next 12 months,
- 62 percent said they are very likely or somewhat likely to purchase new equipment, and
- 60 percent said they are very or somewhat likely to invest in new products or services to expand their businesses.
The potential for wage growth is important to note because it reinforces a trend found in the Bureau of Labor Statistics’ first quarter GDP figures, which showed a 2.9 percent increase in private sector wages and salaries when compared to the same period last year. That was the fastest pace of wage growth since 2008.
There were two areas of uncertainty, however. First, of the small business owners looking to add staff, 64 percent said finding qualified employees will be a challenge. This has been at or near the top of the worry list for many quarters.
It’s also interesting to note that many small business owners – 39 percent – are still uncertain as to how the new tax code will impact their businesses. Another 27 percent said they do not expect to see benefits from the reform while 12 percent said they have already benefitted and 21 percent expect future benefits from the tax reform.
The 2018 Q1 Wells Fargo and Gallup Small Business Index results are based on telephone interviews conducted between April 2-6, 2018 with 603 small business owners in all 50 states, with annual revenues up to $20 million. It has a sampling error of plus or minus 4 percent.