December 10, 2018

Main Street Monday – Confidence Levels Remain Positive According Says Wells Fargo

By Mary Miller, Contributing Editor

Small business performance and confidence levels hold steady and remain positive according to the 2018 Q4 Small Business Index reported by Wells Fargo.

We love stats. Here they are:

· 80% rate current financial situation as somewhat or very good, up from 78% in Q3. Confidence levels for a good financial picture for the next 12 months remain steady at 84%.
· 55% indicate revenue in Q4 increased, up from 49% in Q3. Confidence levels for revenue increase over the next 12 months remains positive at 62%, up from 61% in Q3.
· 74% indicate a cash flow increase in Q4 over Q3 (or 69%). Confidence levels show a steady increase as 78% project increased cash flow over the next 12 months.
· Capital spending allocation holds steady at a reported 53%.
· 47% reported it was average or easy to obtain credit over the last 12 months, up from 40% in Q3. Difficulties in obtaining credit dropped to 11% from 15% as reported last quarter.
· 50% surveyed indicated more confidence in being able to obtain credit over the next year, up from 49%. Perceptions of difficulty obtaining credit over the next year dropped to 13% from 17% in Q3.
· Only 15% projected applying for new credit such as a line of credit or loan over the next 12 months.
· Challenges of overall costs, business operating expenses and capital investment revenue dropped to 4% from 6% in Q3. Credit availability challenges hold steady at 1%.
· Hiring and retaining qualified staff remains the biggest reported challenge at 18%, unchanged from Q3.
· Other challenges are taxes and government regulations at 9% respectively and financial stability/cash flow at 8%.
· For 2019, overall small business operating environment projections are reported as being better (35%), remaining about the same (55%) and getting worse (10%).
· Optimism levels for the future of the business in the next year, 33% were more optimistic (down from 46% in Q3), same level of optimism at 51% (up from 37% in Q3) and 16% less optimistic (down from 17% in Q3).
· Actions the government could take to improve the small business picture include improving the overall economy (83%) and reducing taxes (80%).
You can read the full Wells Fargo 2018 Q4 Small Business Index Survey here.