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Wells Fargo Finds Small Business Expectations Optimistic

A recent press release from Wells Fargo & Company announced the optimistic results of their Small Business Index survey with Gallup. The survey was conducted April 1-14, as small business owners were asked about their financial expectations. The study found that the selection of small business owners polled have grown more optimistic for the first time since 2007.

The survey studied small business Future Expectations, which covers the next 12 months, and the Present Situation. From these, Gallup calculated the overall Index score, which takes into account financial situation, cash flow, revenues, capital spending, job hiring, and credit availability. The Future Expectations score rose nine points (to 10) since 2007, however the Present Situation score dropped 6 points (to negative 11).

Wells Fargo reported that the responses to questions regarding financial situation and capital spending were largely responsible for the increase in Future Expectations scores this year. The survey showed that business owners ranking their financial situation expectations either “very good” or “somewhat good” increased 11 percent from just the last quarter's survey results. They also found that expectations for “a little” or “a lot” of increase in capital spending is up 44 percent from the last quarter.

Ultimately, the survey found 61 percent of small business owners are optimistic about their financial situation in the next 12 months, and 23 percent expect increased capital spending in that period.

The overall small business owner optimism score rose three points to -1. The press release pointed out that a score of zero would indicated business owners on the whole are neutral, not optimistic but also not pessimistic, about their situations. The index high was 114; this was last reached in November 2006. Future expectations were also calculated higher at 10, up nine points from the previous quarter.

The Wells Fargo/Gallup Small Business Index has surveyed small business owners for the last 24 quarters. For this survey, 602 owners were interviewed by telephone. The survey included 12 questions about the present and future. The range of the index is from -400 to +400. The margin of sampling error is +/- 4 percentage points.

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