SAN FRANCISCO–(BUSINESS WIRE)–
Small business optimism is the highest it has been since third quarter
2008, according to the latest Wells
Fargo/Gallup Small Business Index conducted July 22-26.
The Wells Fargo/Gallup Small Business Index improved 9 points since
second quarter and 36 points since the fourth quarter of 2012, to a
positive 25 (+25). A major driver of this improvement is business owner
optimism around availability of credit now and in the future. While it’s
well below pre-recession levels, the Index score is the highest it has
been in five years. In August, the Index marks its 10th
anniversary of measuring U.S. small business owner perceptions of the
economy and business impact.
“For 10 years, the Small Business Index has taken the pulse of small
business owners in America,” said Doug Case, Wells Fargo small business
segment manager. “The survey has shown a slow and uneven recovery for
small businesses, and this quarter we continue to see business owners
express cautious optimism as economic trends improve, such as a
strengthening housing market.”
Access to Credit
Small business owners said they feel more optimistic about their ability
to access
credit over the next year. In the survey, 28 percent of small
business owners said they expect credit to be very or somewhat easy to
obtain in the next 12 months, up from 24 percent in the second quarter
of 2013 and the highest percentage since 2009. Thirty percent said they
expect credit to be difficult to obtain in the next 12 months – down
significantly from the 36 percent recorded last quarter and the lowest
this measure has been in five years.
Housing Impact on Small Businesses
The July survey asked business owners about today’s real estate and
housing market, and its impact on their businesses. A majority of small
business owners (57 percent) said they have seen an overall improvement
in the housing market in their area. At the same time, 42 percent
reported that their business relies either somewhat (22 percent) or a
great deal (20 percent) on a strong housing market. Moreover, 45 percent
indicated that a rise in housing prices would improve their business’s
sales either somewhat (33 percent) or a great deal (12 percent).
Capital Spending
In the most recent survey, 25 percent of small business owners reported
an increase in capital spending in the past 12 months. Additionally 26
percent of business owners said they are planning to increase spending
in the next 12 months, consistent with last quarter’s results. The
number one reason business owners cited for not making a capital
investment was continued concern about the overall state of the economy
(64 percent) followed by uncertainty in the future of their business (57
percent).
Small Business Index Key Drivers
Wells Fargo, together with Gallup, surveys small business owners
quarterly across the nation to gauge their perceptions of their present
situation (past 12 months) and future expectations (next 12 months) in
six key areas: financial situation, cash flow, revenues, capital
spending allocation, hiring, and credit availability.
Index Scores: Q3 2012 – Q3 2013
10 years of Wells Fargo/Gallup Small Business Index
Highlights:
-
Q3 2003: The Small Business Index debuts with a score of positive 69
(+69). - Q4 2006: Index reaches highest score at positive 114 (+114).
-
Q2 2008: Index falls to positive 48 (+48) after 18 consecutive
readings at or near positive 100 (+100). -
Q1 2009: Index drops 14 points and falls into negative territory (-4)
for the first time in the survey’s history in the midst of the
recession. -
Q3 2010: The lowest reading for the Index is recorded at negative 28
(-28). -
Q1 2011: Index begins to see improvement and climbs into positive
territory with a score of positive 12 (+12). -
Q3 2013: Index rises to positive 25 (+25), the highest level of
optimism in five years.
Infographic: Wells
Fargo/Gallup Small Business Index Q3 2013
Note: Complete survey results available upon request, or visit
the Wells
Fargo Business Insight Resource Center.
About the Small Business Index
Since August 2003, the Wells Fargo/Gallup Small Business Index has
surveyed small business owners on current and future perceptions of
their business financial situation. The Index consists of two
dimensions: 1) Owners’ ratings of the current situation of their
businesses and, 2) Owners’ ratings of how they expect their businesses
to perform over the next 12 months. Results are based on telephone
interviews with 602 small business owners in all 50 United States
conducted July 22-26, 2013. The overall Small Business Index is computed
using a formula that scores and sums the answers to 12 questions — six
about the present situation and six about the future. An Index score of
zero indicates that small business owners, as a group, are neutral —
neither optimistic nor pessimistic — about their companies’ situations.
The overall Index can range from -400 (the most negative score possible)
to +400 (the most positive score possible), but in practice spans a much
more limited range. The margin of sampling error is +/- four percentage
points.
About Wells Fargo
Wells Fargo Company (WFC) is a nationwide, diversified,
community-based financial services company with $1.4 trillion in assets.
Founded in 1852 and headquartered in San Francisco, Wells Fargo provides
banking, insurance, investments, mortgage, and consumer and commercial
finance through more than 9,000 stores, 12,000 ATMs, and the Internet (wellsfargo.com),
and has offices in more than 35 countries to support the bank’s
customers who conduct business in the global economy. With more than
270,000 team members, Wells Fargo serves one in three households in the
United States. Wells Fargo Company was ranked No. 25 on
Fortune’s 2013 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy all our customers’ financial needs and help
them succeed financially. Wells Fargo perspectives are also available at blog.wellsfargo.com.
Wells Fargo loans more money to America’s small businesses than any
other bank (2002-2011 Community Reinvestment Act government data) and is
a leading lender to women- and diverse-owned businesses. With the
nation’s largest network of retail banking stores, and an award-winning
online library of videos, articles and webcasts known as the Business
Insight Series (www.wellsfargobusinessinsights.com),
Wells Fargo provides business owners with timely advice and information
to educate and help them succeed financially. For more information, or
to speak with a Wells Fargo banker, visit wellsfargo.com/biz
or call the National Business Banking Center at 1-800-CALL-WELLS.
About Gallup
For more than 70 years, Gallup has been a recognized leader in the
measurement and analysis of people’s attitudes, opinions and behavior.
While best known for the Gallup Poll, founded in 1935, Gallup’s current
activities consist largely of providing marketing and management
research, advisory services and education to the world’s largest
corporations and institutions.
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