The most recent survey of small business optimism was released this month and the news is consistent with previous surveys: small business owners continue to be optimistic.
Capital One's Small Business Growth Index, a late-summer survey of 500 small business owners across the country found that optimism is up, as well as sales and business conditions. 60 percent of those polled found business conditions to be "good or excellent." The numbers, which also took into account hiring plans and future financial positions, was the highest since 2012.
"I believe that small business owners are confident about the future," Johannes Endhardt a Vice President at the bank told me over breakfast. "The stock market has been going very well over the last half year, which shows consumer confidence is strong. And the overall economic environment leans in that direction," (Capital One is a client of my company, The Marks Group PC, but I have received no compensation to write this article).
Endhart's opinions were validated by Megan Murray, a senior manager at the U.S. Chamber of Commerce. "We represent millions of companies and the majority of them are small businesses and most of the ones I speak to continue to express optimism," she said. "I think it'll be interesting to see what happens in the next few months, but I do think there's enough that has happened already to give them continued confidence."
The big question is: will small business owners put their money where their mouths are? So far, the news is encouraging.
Durable goods orders - which are goods not for immediate consumption and able to be kept for a period of time, like refrigerators and cars - were very strong in September and this week's numbers for October are also expecting to be strong. Business investment, which is measured by core capital-goods orders has climbed 7.8 percent this year, the fastest pace since early 2012, according to a Marketwatch report. Of course, these numbers indicate spending by larger companies, but it's common for small businesses to mirror, although on a reduced scale, the activities of bigger corporations.
Hiring is also up. According to this report in Reuters, nonfarm payrolls increased by 261,000 last month which was the largest gain since July 2016. The unemployment rate continues to stay low and the demand for skilled employees, as shown by September's JOLTs index remains high, with openings running about 10 percent over actual hires.
Tax reform and continued de-regulation may continue these trends. But that doesn't negate challenges that many small business owners will continue to face in 2018. The Capital One Index highlights a few of these, including managing cash flow and keeping up with technology. Many of my clients also continue to struggle with controlling their healthcare costs in a very uncertain regulatory environment and finding good people.
But everything's relative. The bottom line is that small business owners are feeling pretty good about their prospects and are beginning to invest and hire. Sure, there are challenges. But how many of us felt this way back in 2009? Or 2010? Or even the few years after? Running a small business will never be without its challenges but, as Thanksgiving approaches, many of us are feeling quite grateful for this economic environment.