Small-business owners say they feel the most optimistic since July 2008, according to the latest findings from the Wells Fargo and Gallup Small-Business Index.
The survey now stands at positive 15 for January as opposed to minus three in October after two previous readings of zero, which is neither optimistic nor pessimistic. Among the respondents, 49 percent say they believe revenues are to increase, up from 37 percent in the fourth quarter of 2011. Sixty-three percent of respondents say they expect their financial situations to be very or somewhat good over the next 12 months, an increase from 55 percent in the fourth quarter of 2011.
Regarding hiring, 22 percent of respondents say they plan to add jobs, up from 15 percent in the fourth quarter of 2011, while 8 percent of respondents say they expect to decrease the number of jobs, down from 13 percent in the fourth quarter of 2011. Another 53 percent of respondents say they expect their cash flow to be very or somewhat good, representing a jump from 48 percent in the fourth quarter of 2011.
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Twenty-seven percent of respondents say they believe credit should be very or somewhat easy to obtain, an increase from 22 percent in the fourth quarter of 2011, although 38 percent of respondents say they expect credit should be very or somewhat difficult to obtain, a decline from 43 percent in the fourth quarter of 2011.
The survey also includes a present situation component that examines the past 12 months, and it finds an improved minus six in January, up from minus 11 in the fourth quarter of 2011. This marks the best reading in this component in three years. Attributing to this improvement is an increase in business owners who experienced increased revenues at 33 percent, an ease of accessing credit at 25 percent and an increase in capital spending at 24 percent over the past 12 months.
"January's increase in optimism signals that small-business owners are seeing a brighter future," says Doug Case, Wells Fargo's small-business segment manager. "While this economy still presents challenges for many business owners, we are encouraged by expectations for improved revenues, financial situation and cash flow, which have the potential to drive job growth."
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