Report: Business Owners Regaining Confidence in the Economy
According to a recent survey by Houston-based human resources company Administaff, small business owners are growing more confident in the economy, but still harbor trepidation due to impending government legislation.
The survey, which involves a quarterly poll and financial data analysis of the 5,900 businesses Administaff serves, reports that 76 percent of the respondents listed the economy as their top short-term concern, down from 83 percent last quarter, followed by health care reform at 50 percent. The report also indicates that 28 percent of owners are adding new positions, up from 23 percent three months ago, and that sales commissions edged up by 4.1 percent – the first time in one year.
"I think small businesses have really been in a foxhole with the economic environment and politically, as well," says Paul J. Sarvadi, Administaff chairman and CEO. "(Now) they're raising their heads up and out of the hole, but they're not coming out yet."
Along with health care reform, the report also cites government expansion and potential tax increases as major concerns among small businesses. Raymond J. Keating, chief economist at the Oakton, Virgina-based Small Business and Entrepreneurship Council, says the uneasiness is a result of conflicting messages among policymakers.
"There's tremendous uncertainty on the policy front for small business owners looking ahead," says Keating. In October, President Obama announced increased Small Business Administration loans, while the current health care reform bill proposed by the House of Representatives will be partly funded by taxes on the wealthy – which, some argue, will include small business owners.
The survey results are the latest statistical glimmers of hope extolled as the "beginning of the end" of the recession. Late last month, it was reported that the economy had grown 3.5 percent, followed by a 9.5 percent increase in the productivity rate. But those figures would be doused by an announcement that the jobless rate had reached 10.2 percent, a 26-year high.
Keating says the real telltale sign of a "robust recovery" will be a renewed commitment to investing.
"I think what you've got to see is a shift, in terms of private sector risk taking," he says. "Private sector investment, private sector business start-ups … once that shifts to positive, everything else will follow."