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Small Businesses Maintain Optimistic Outlook

Energy costs and rate hikes fail to erode a positive view based on companies’ own successes.
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Small business owners remain optimistic about the current and future state of their small business despite soaring gas prices  and interest rate increases, according to a new Wells Fargo/Gallup Small Business Index.

The study, released August 1, found that 72% of small business owners surveyed said their company's financial situation was very good or good. Eighty percent expected to be even better off financially a year from now, compared to 6% that expects to be worse off.

"Small business optimism remained near cyclical highs in the second quarter," said Scott Anderson, senior economist at Wells Fargo, in a statement. "Small businesses are not yet feeling overly pressured by the Fed's rate hikes. Most small businesses report that credit remains readily available, despite higher borrowing costs. This is significant since small businesses are traditionally more sensitive than big businesses to Fed tightening cycles."

Fifty-two percent of small business owners said credit is still readily available and 55% expected it to remain available into 2007. Ten percent thought it would be difficult to obtain credit over the next 12 months.

The majority of small business owners surveyed linked their optimism to stable revenues, cash flow, capital spending and hiring. Nine out of ten described themselves as successful business owners and 87% said they were satisfied with their careers.

The results of the survey were based on telephone interviews with about 600 small business owners across the nation conducted between May 22, 2006 and June 9, 2006.

Wells Fargo and the Gallup Organization have been conducting the Small Business Index survey since the fall of 2003. Each quarter they compile information from small business owners on their perception of current conditions and expectations relating to their financial situation, revenues, cash flow, capital spending, number of jobs and credit availability.

Last updated: Aug 2, 2006




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