April 29, 2019
By Mary Miller
Contributing Editor, Main Street Monday
Main Street Monday – Small Business Owners Cautiously Optimistic About Economy
The release of the latest economic forecasts and surveys to date indicate that while small business owners remain optimistic about the economy, they are cautiously optimistic. The buzz word is “conservative” in terms of growth, expansion and overall capital outlays.
A survey conducted by the U.S. Chamber of Commerce and MetLife in January of this year shows:
- 53% of small business owners feel good about the national economy, down from 58% from survey results from Q4 2018.
- 53% believed their local economy was in good shape, down from 56%.
- An accompanying small business index fell from 69.3 in Q4 2018 to 65.6.
While the survey results show a slight decline in optimism, small business owners continue to remain positive about the future of their businesses and that “their fundamental operations remain strong,” according the chamber and MetLife.
Reasons for the more cautious approach include a dip in production and new orders in February according to a monthly manufacturing report by the Institute for Supply Management, and a decrease in new jobs (12,000 jobs added in February, down from 107,000 in January) per ADP.
The Congressional Budget Office gross domestic product forecast predicts an increase by 2.3% in 2019, down from 3.1% in 2018. This decline is primarily due to the economy bump from the new tax law in 2018, which will not happen again in 2019.
The takeaway is that small business are embracing a conservative, cautiously optimistic approach across the board from expansion to hiring to overall business outlook.