Wall Street Journal/Vistage Small Business CEO Survey: Steady confidence, slowing growth
According to results from the June 2017 Wall Street Journal/Vistage Small Business CEO Survey, economic confidence among small business CEOs is holding steady. The Small Business Confidence Index measured 110.4 in June, compared to 110.9 in May and 112.3 in April.
Other highlights from the June survey, which had 804 participants, include the following.
CEOs anticipate slower growth
According to the majority (57 percent) of small business CEOs, the U.S. economy has improved in the past year. However, in the June survey, CEOs expressed less confidence in terms of economic prospects for the year ahead, with only 38 percent expecting growth to improve, compared to 55 percent three months ago. About 46 percent of respondents said they believed that economic conditions will not change in the year ahead, while 14 percent anticipate a downturn.
“The declines probably reflect the realization of significant delays in most of Trump’s proposed policies, most notably delayed tax reform,” said Dr. Richard Curtin of the University of Michigan, who analyzed the survey results.
Firms stick with investment plans
According to the June survey, half of all firms (50 percent) say they will increase investment expenditures during the year ahead. This is largely consistent with reports from earlier in the year, which ranged from 47 to 49 percent, but the highest figure in the past two years.
Hiring continues despite challenges
About 61 percent of CEOs said they would increase the total number of employees at their firms, a figure consistent with reports from recent months.
“Despite the concerns about the potential of economic growth slowing, small firms have shown no letup in their efforts to hire more employees,” said Curtis. “The data suggest that labor markets will continue to tighten, and wage and benefit cost will continue to rise.”
More than half of CEOs (58 percent) said they were facing challenges in hiring the workers they needed. In response to these challenges, CEOs said they were boosting wages (33 percent), increasing benefits (13 percent) and increasing on-the-job training (28 percent). However, more than half (55 percent) of respondents said that uncertainty about taxes, health care and other economic policies was not impacting their business.
Strong expectations for increasing revenues, profits
In June, 71 percent of all firms said that they expected revenues to increase. This is on par with the 75 percent reported in May and 77 percent in January, and also 10 percent higher than one year ago. Only 5 percent of firms said that they expected revenues to decline.
In keeping with the past six months, 60 percent of all firms said they expected higher profits in the year ahead. Only 9 percent of firms expected profits to worsen, compared to 17 percent one year ago.