Data from the MetLife & U.S. Chamber of Commerce Small Business Index this quarter indicate that employers are experiencing a boost in confidence about the state of the national economy and their financial future.
The overall index score increased this quarter to 68.7 (up from 65.6 last quarter) indicating that nearly 69% of small business owners currently have a positive outlook about their companies and the small business environment. This 3.1-point rebound follows a drop during the first three months of 2019 and matches the largest quarter-to-quarter increase in economic confidence since the Index began in 2017.
It's hard to pinpoint what’s behind the uptick and the survey doesn’t ask respondents why they feel the way they do. But let’s not forget: the first quarter also featured the longest federal government shutdown in history. Government shutdowns – and the unpredictability they bring – are usually not known for stoking business optimism about the state of the economy or the health of business.
This quarter, with no shutdown in sight (the survey was administered from April 1-May 6), small manufacturers, women-owned small businesses and Northeastern small businesses all notched noticeable upturns in optimism about the national economy.
Again, it’s not provable cause and effect, but here are some interesting stats from this quarter:
- 59% of small businesses say the U.S. economy is in good health, up six percentage points from 53% last quarter.
- 69% of manufacturers feel positive about the national economic outlook, up 16 percentage points from last quarter.
- Female-owned businesses have a renewed optimism (58%) about the U.S. economy this quarter – only one percentage below that of male-owned businesses.
- 58% of Northeast small businesses believe the U.S. economy is in good health, up from 51% last quarter and up 12% from one year ago (46%).
This quarter’s index also casts a spotlight on one of the most complex and time-consuming chores for small business owners – navigating health insurance options.
Sixty-nine percent of survey respondents say the process of selecting health insurance plans is time consuming, and one in every five small business owners say they do not have enough information to make informed decisions about health care options.
When they begin to seek out guidance about health care options, these small business owners most commonly turn to brokers, consultants or agents (32%), with fewer depending on online search engines (9%) or seeking advice from other business owners (7%).
“It’s pretty time consuming to navigate and understand the best options for your employees,” said Natalie Kaddas, president and CEO of Kaddas Enterprises in Salt Lake City, Utah.
Her small manufacturing company works with a broker, who each year provides information on cost increases for her current plan and alternative plans worth considering. Still, Kaddas says she and her staff could use more guidance.
“I wish I had some more data and information,” Kaddas said. “I feel like some of my employees are choosing a plan without a lot of information. There’s an educational component that’s missing, and I don’t necessarily have the skill set to try and bridge that gap – but I try.”
When it comes time to select a health care plan, cost is a top concern. One in five small business owners say their top priority when considering plans is keeping monthly premiums low; another 20% prioritize minimizing out-of-pocket costs like co-pays and deductibles. Meanwhile, 9% of owners say flexibility and variety in choice is paramount when considering their options, followed by access to quality hospitals and treatments (7%) and the quality and size of provider networks (6%).
“For small business owners, health care costs and complexity continue to gobble up time and resources that could otherwise be spent growing their companies and creating more jobs,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce.