Key Findings


Small business confidence rises,
led by professional services

54% of professional services
businesses felt “very good”
about their company’s health

Up from 36% in Q3

The rise in this quarter’s national Index score is reflected in a more confident small business operational environment. Almost two-thirds (61%) of small business owners describe the financial health of their company as “good” this quarter, about the same as last quarter. But within that group, 39% of respondents rated their outlook as “very good,” up from 35% last quarter.

Larger small businesses with 100 to 500 employees saw the greatest increase in their business outlook this quarter, with 65% rating their overall business as “very good,” up 13 percentage points from last quarter. Companies with fewer than four employees saw the second largest boost, with 37% of businesses rating their overall health as “very good,” up nine percentage points since last quarter. Sentiment in mid-sized small businesses stayed relatively stable.

The Professional Services* industry saw the greatest jump in sentiment, with 54% of businesses surveyed feeling “very good” about their organization’s health, an 18 percentage point jump from last quarter. In contrast, the retail sector saw its confidence fall, with 17% of respondents viewing the health of their business as “somewhat poor” or “very poor,” the highest negative outlook of any industry surveyed this quarter. Retail’s negative outlook is up from just 8% last quarter.

*Includes the following industries: Information; Finance and Insurance; Real Estate, Rental, and Leasing; Professional, Scientific, and Technical Services; Management of Companies and Enterprises; Administrative and Support; and Waste Management and Remediation Services.

Possibly the best profit we’ve had—we are distributing bonuses and raises again—we feel pretty healthy.

Professional Services

Our bottom line membership numbers are up. We've been able to turn over seasonal members to full-time members. We've kept back capital costs.

Arts, Entertainment, and Recreation Industry

It started slow in January through to April, but has grown over the summer, and the fall is looking promising.

Construction Industry


The gulf between the national and local
economic outlook us widening

The gap between the outlook for the local and national economies is widening—highlighting a divergence in perception—with just 38% of small businesses bullish on the national economy versus 48% who are bullish on economic growth in their own backyard. The 10 percentage point gap in relative sentiment doubled from last quarter when 41% of small businesses were positive on the national economy and 46% were optimistic about their local economy.

Small business owners in the West are most upbeat about their local economy (55%) but are on par with the rest of small business owners when evaluating the national economy (39%). In contrast, small business owners in the Northeast feel the least optimistic about both the national economy (36%) and their local economy (37%).

Businesses that have been in operation for less than ten years, those in the Professional Services industry, and those with more than 20 employees were the primary drivers of positive sentiment on local economies, up six percentage points from Q3.

The number of small businesses reporting stiffer competition rose to 20% in Q4 from 15% in Q3. Ease of doing business remains steady, with 70% reporting that time spent on licensing and other compliance measures remains the same.

Local vs. national economic health perception gap has doubled since Q3

Our local economy is booming… People are finally realizing what a great thing we have going on up here. There are more visitors, more hotels, more restaurants— we’re breaking records.

Owner & President
Valley Linen Company
Kalispell, Montana

The linchpin for entrepreneurship starts with the local economy’s support and the infrastructure that is in place, and it’s getting stronger here…you need companies and community members in your own backyard to support you. When you get those opportunities, it’s an eye-opener for how powerful your local economy is and a real watershed moment.

Heads Up Display, Inc.
Buffalo, New York


Revenue and investment expectation
remain steady

of Manufacturing
and Resources
businesses expect
revenues to increase
in the next year
Up from 51% in Q3

of small businesses
plan to increase
Up from 23% in Q3

A majority of small business owners (57%) are optimistic that their revenue will increase next year, consistent with Q3 optimism (56%). Businesses in the Manufacturing and Resources industry saw the highest increase in optimism from last quarter, with 62% saying they expect next year’s revenue to increase, up 11 percentage points from Q3 (51%). There continues to be a gap in revenue expectations between businesses who are less than 10 years old and those that have been in operation for more than a decade, with three-quarters (73%) of newer businesses expecting revenue to increase next year versus 53% of more established businesses. A similar gap was seen in Q3: 70% versus 52%.

A quarter of all small businesses (25%) report they will be increasing investment in the upcoming year, remaining steady from Q3 (23%) and Q2 (25%). Investment expectations for next year are driven primarily by businesses that have been in operation for less than ten years, with 39% of business owners and decision makers reporting they plan to increase investment. Expectations are higher for businesses with 5-19 employees (31%) and those with 20-99 employees (29%).


Ho-Ho-Ho for some, Ho-Ho-Hum for others

With the exception of retailers, a majority of small business owners report that the holiday season (and Q4 in general) is not a “make-or-break” time of year for them. More than half of retailers (55%) view holiday sales as “very important” or “somewhat important” to their overall annual profit. However, three-quarters of all small business owners report that revenue either remains the same (50%) or decreases for the holiday season (24%).

54% of retailers report
that the holiday season
is very important

Over half of manufacturers (55%) and professional services firms (59%) report that the holiday season is not at all important to their overall profit, and more businesses in these sectors actually report a decrease in their quarterly revenue this time of year. Many outside of the retail and hospitality industries note that their businesses routinely close during the holiday period. Others in various service industries, such as auto repair, say that one particular time of year is not more impactful than another.

Importance of the holiday season by industry

Our business is entirely based on luxury and high-end goods, so we see an increase for holiday purchases.

Retail Trade Industry

My business drops off for the holidays. Most people use their money for presents and not tires or auto repair.

Services Industry

The holiday season is overall the most important season for a toy store. We hire more part-time workers and close at 9 p.m. or 10 p.m. during the holidays or we lose sales.

Retail Trade Industry