A majority of small companies in the United States say they’re planning for growth in the coming year, according to the recently released Bank of America Small Business Report. A full 78% of small businesses said they expect to grow their companies over the next five years, a nine-percentage-point increase from the 67% of small businesses that reported the same sentiment last year at this time.
“There was a marked jump over a year ago, and while Millennials continue to be the most optimistic generation, there was a notable increase across the board,” said Bank of America Small Business Executive Robb Hilson.
Another indication of a positive outlook for 2016 is 67% of small-business owners plan to hire more employees over the next year, compared with 51% in 2014. Nearly three-quarters of small-business owners also say they expect their revenue to increase in the upcoming year, up 10 percentage points from a year ago.
The bright outlooks on the eve of 2016 stem from increasing confidence in the national economy. The Bank of America report says small-business owners' confidence in the national economy rose from 45% to 56% in the last year, “representing the highest increase since the inception of our survey in 2012.”
This came as small businesses were digesting the first increase of interest rates in about a decade. That, though, doesn’t seem to be impacting the forecasts of small businesses – if anything, it’s helping to improve their outlooks. “People don’t seem to think that a rate hike is going to have any material effect on their business,” Hilson said. “It’s a natural extension of an improving economy.”