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How high can small business optimism go?
That’s the question that comes from the latest MetLife & U.S. Chamber of Commerce Small Business Index.
The index hit 68.7 in Q2, up 2.4 points from Q1 – another record high – driven by confidence in local economies.
Forty-eight percent felt good about their local economies. That’s tied for the highest level in the history of the Index.
Small businesses in the West were the most confident (55%) in their local economies followed by the Midwest (50%).
As for the national economy, small businesses’ confidence fell eight percentage points to 47% but continues to be strong. To put it in context, this decrease comes after a 17 percentage point increase in the first quarter and is still the second highest rating in the history of the Index.
It also should be noted a majority of small businesses owners expect higher earnings and 62% expect higher revenues one year from now.
“Small business owners remain optimistic and by taking action to help alleviate some of their current obstacles and ensure opportunity, we will in turn further increase Main Street optimism,” said Suzanne Clark, senior executive vice president of the U.S. Chamber of Commerce.
More business are hiring
Economic optimism is translating into more jobs.
This past quarter, 18% said they added to staff in versus 16% in the first quarter of the year.
About one-third plan to hire more in the next year with larger companies more likely to do so. Sixty-one percent of small businesses with more than 100 employees expect to add to staff.
Women and men small business owners confident
The survey also found some differences in the views of men and women small business owners.
While both are optimistic about their businesses, men are more confident in the national economy (49%) than women (40%). The gap shrinks a bit when it comes to local economic confidence: 49% for men versus 45% for women.
Women are more confident when it comes to their businesses. Sixty-five percent of female small business owners expect higher revenues in the next year compared to 61% of men. Also, more women expect to hire (36% vs. 30%) and invest (30% vs. 28%) more in their businesses over the next 12 months.
With businesses continuing to adjust to last year’s pro-growth tax reform, along with further deregulation efforts by the federal government, there's plenty to fuel small businesses' optimism.
The sky’s the limit for how high it can go.