Small business owners have had a burst of optimism even as the economy has slowed.
That’s the finding of a survey released Tuesday by Bank of America, which found that 56 per cent of owners are optimistic about the national economy, up 8 percentage points from a survey last spring and 11 points from one taken a year ago. The latest survey, which questioned 1,001 owners, was conducted from late August through late September.
Bank of America found owners considerably more upbeat than other recent surveys have shown. That surprised Bank of America Small Business Executive Robb Hilson, but he also said it coincides with an increase in the bank’s small business lending. Its loans to small companies were up 4 per cent through the second quarter. Lending has increased as small businesses extend their recovery from the recession.
“There’s plenty of evidence in the economy that there are a lot of companies on solid footing,” Hilson said.
The Commerce Department reported last month that the U.S. economy slowed sharply in the summer. But most economists think growth has been strengthening since the July-September quarter ended.
Reports like the monthly hiring tallies from payroll provider ADP and Intuit have shown small businesses are still uneasy about taking on risks like hiring. Another monthly report, the Thomson Reuters/PayNet reading on small business borrowing, also has shown caution.
One explanation for the divergent readings is they are taken from diverse groups of small business owners. The ADP and Intuit, for example, rely on information supplied their small business customers. The Bank of America survey is conducted by Braun Research, which uses a representative sample of business owners. Taken together, the reports show the fragmented nature of small business and how individual companies are doing.
The Bank of America survey showed a big increase in the number of owners planning to hire during the next year — 67 per cent said they plan to hire, compared 46 per cent this past spring and 51 per cent a year ago. Thirty-five per cent of owners planned to apply for a loan in 2016, up from 24 per cent who planned to borrow in 2015.
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