- Small business owners are the most optimistic they have been in years as recession warnings wind down and employment trends remain healthy, according to the US Chamber of Commerce and MetLife’s small business index.
- The metric rose to 71.3 in the fourth quarter from 70.7 in the last three-month period, hitting its highest level since the survey’s inception in 2017.
- One in five of the firms surveyed said they increased their staff size in the past year, helping keep the unemployment rate near record lows.
- Small manufacturers posted the lowest optimism around future revenue projections, mirroring a Monday reading from the Institute of Supply Management’s factory-activity index.
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Small business owners are the most optimistic they have been in years as recession fears wind down and hiring trends hold strong, according to the US Chamber of Commerce and MetLife’s small business index.
The metric hit 71.3 in the fourth quarter, up from 70.7 in the last three-month period. The latest reading is the highest since the survey’s inception in 2017, with the strong result driven by positive economic outlook and optimism around business performance, the Wednesday report said.
The rosy outlook has also prompted smaller firms to keep the US unemployment rate near record lows. One in five of small businesses surveyed said they increased their staff size in the past year, and more than half of millennial-owned businesses noted they planned to hire more.
The fourth-quarter report also focused on the role of technology in small business owners’ management. The survey found the firms are more likely to invest in tech that supports day-to-day operations, such as accounting programs and data privacy software, than more complex applications like cloud computing or large-scale data analysis.
“No matter what business you feel like you’re in, almost every company now is a ‘tech company’ – or should be,” Ontario Systems vice president and U.S. Chamber Small Business Council member Casey Stanley said. “Businesses that make steady and smart investments in technology are the ones who lead, are more profitable, and are more prepared to weather challenging business times.”
Small manufacturers represented a sore spot in the report, who cited some of the same hurdles as their larger peers. While 26% of businesses surveyed planned to increase investments, 19% of small manufacturers had such plans. The subset also remains the least optimistic with their future revenue projections, though the segment’s positivity grew to 54% from 49% in the third quarter.
The US manufacturing sector slipped further into a recession in November, with the Institute for Supply Management’s factory-activity index dropping to 48.1 in November from 48.3 the previous month. A reading below 50 indicates economic contraction. The sector was primarily weighed down by the US-China trade war, as several manufacturing firms take the brunt of tariffs placed on American goods.
The Chamber of Commerce and MetLife survey was conducted with a sample of 1,000 small business owners polled between September 27 and October 25.
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