Small Biz Optimism Hits Five-Year High
Highest Since Third Quarter 2008
A new survey released by Wells Fargo and Gallup shows optimism among small-business owners continues to steadily improve, reaching a high point last measured during the third quarter of 2008. Based on its latest index, Wells Fargo and Gallup said small business optimism improved by nine points compared to the second quarter. The index, which now sits at positive-25, is also up by 36 points over the fourth quarter of 2012, data showed.
"A major driver of this improvement is business owner optimism around availability of credit now and in the future," Wells Fargo said, in a statement. "While it's well below pre-recession levels, the index score is the highest it's been in five years."
The survey matches the sentiment of distributors in the ad specialty market, as Counselor's Confidence Index (CCI) soared in the second quarter to 109.6, an increase of seven points from the first quarter reading. The CCI is a measure of industry health, as it asks distributors to weigh their outlooks for their businesses in the coming months. The second-quarter CCI, which was initially released last month, is at its highest level since 2006. The results of the third quarter CCI will be announced in October.
A closer look at the Wells Fargo survey data reveals that 28% of small-business owners believe credit to be "very or somewhat easy to obtain" in the next year – the highest percentage recorded since 2009. Meanwhile, 30% expect credit to be "difficult to obtain" in the next 12 months, down from 36% in Q2. About one quarter of survey respondents reported an increase in capital spending in the past year, while 26% plan to increase spending in the next 12 months. Most small-business owners (57%) also said they have seen overall improvement in the housing market in their region.
The highest score ever recorded by Wells Fargo and Gallup was positive-114 in the fourth quarter of 2006. At its lowest point, in the third quarter of 2010, the index dipped to a negative-28.