America's small business owners are feeling fairly bullish about their companies right now, with most eyeing revenue growth and many looking to add staff in the coming months. But when asked about the current health of the economy, small employers' views are markedly less rosy, a new survey shows.
Released Wednesday, the first MetLife & U.S. Chamber of Commerce Small Business Index—a new national quarterly survey of 1,000 small business owners—shows that 60 percent expect their company’s revenue to increase next year and 29 percent are planning to increase their headcount, compared to just 9 percent and 6 percent who expect to see those numbers decline, respectively. In addition, those planning to increase their investments in their companies next year outnumber those planning to pull back.
"Our Index revealed that there is a huge potential for growth on Main Streets across the country,” Suzanne Clark, senior executive vice president at the U.S. Chamber, said in a statement. “Not only are small businesses looking to add employees, but they’re optimistic about growing their revenue and investing back in their companies.”
The Q2 Index produced a reading indicating that roughly 60.6 percent of small employers currently have a positive outlook on their businesses and the environment in which they operate. The Index score takes into account owners' views about the current health of their company, their take on the economy and other external forces that impact their firms and their plans for the near future.
On questions about the economy, small business owners expressed more mixed views. A quarter of respondents described the current health of the American economy as somewhat or very poor, while only a third described it as somewhat or very good. Owners offered only a slightly more positive take on their local economies, with 42 percent giving a thumbs up and 22 percent giving a thumbs down.
“Even though the economy has been somewhat stagnant, I am cautiously optimistic,” one small business owner in South Carolina said. Another in Kentucky echoed the same sentiment, adding: “The overall U.S. economy has not grown like we would have hoped from a major recession. I am cautiously optimistic.” A third in New Jersey added: “My business is pretty healthy. It’s not fantastic, but it’s pretty healthy.”
Clark—who earlier this year traveled the country to hear from small business owners as part of the Chamber’s #LetsGrow tour—emphasized the importance of reigniting America’s economic growth and giving those small business owners a greater sense of confidence. “Strong economic growth is the key to unlocking the potential of America’s entrepreneurs,” she said. “Now more than ever, it’s important for us to understand their perspectives so we can help them succeed and grow.”
Produced with support from research group Ipsos, the MetLife & U.S. Chamber of Commerce Small Business Index is designed to capture the complete 360-degree view from Main Street and provide a deeper understanding of what’s influencing the decisions of today’s small businesses.
“Small businesses strengthen the fabric of our communities and are the backbone of the American economy, accounting for more than half of the nation’s economic output today,” said James W. Reid, MetLife’s executive vice president for regional and small business solutions. “Our Index can elevate the voice of the small business owner, and, quarter after quarter, their voice will help us all work towards solutions that translate into small business success.”
In addition to the top-line findings, the Q2 Index added to a mountain of research showing that America’s employers are struggling to find qualified candidates for job openings. One in every four small businesses surveyed rated the quality of recruits for their open positions as poor, compared to only about one in 10 (11 percent) who rated the quality as very good, lending further evidence to the notion that America’s economic growth is behind handicapped by a yawning skills gap.
“The quality of recruits is on the poor side,” one small employer in Colorado remarked. “They aren’t people I would be really interested in having work for me.”
Also, the Index showed that small business owners are struggling with a growing number of demands on their time. One in four stated that government, regulatory and licensing tasks are taking up more and more of their time. In addition, 30 percent of respondents said they are working more hours today than they did a year ago, while only 6 percent are working fewer.
As one small business owner in North Carolina put it: “There just isn’t enough to do everything.”
About the authors
J.D. Harrison is the former Executive Director for Strategic Communications at the U.S. Chamber of Commerce.