Small-Business Owners’ Optimism Softens

U.S. small-business owners’ optimism about business conditions remains strong, but it’s down from record highs observed in 2018. The Wells Fargo/Gallup Small Business Index, which measures small-business owners' attitudes about a wide variety of factors affecting their businesses, is down to +106 in first quarter 2019 from the record high of +129 set in fourth quarter 2018. The index’s drop erases the gains in confidence seen in the last two quarters of 2018 and returns the index to where it was from third quarter 2017 through second quarter 2018.

Gallup notes that the current survey was conducted January 9 through 15, during the partial government shutdown, and the declines registered in the quarter were fueled by a drop in items related to small-business owners’ optimism about their current financial situation and a drop in their overall future expectations.

The survey also found that in the first quarter 45 percent of owners reported their revenues increased “a lot” or “a little,” compared to 55 percent who said the same in the previous quarter. Looking ahead, 55 percent of owners expect their revenues to increase “a lot” or “a little” in the coming months, compared to 62 percent last quarter. And regarding their current cash flow, in the first quarter survey 66 percent said it was “very” or “somewhat” good, compared to 74 percent in fourth quarter 2018.

For more on the Wells Fargo/Gallup Small Business Index survey’s findings, click here.

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