Economic confidence inches upward in May 2019 WSJ/Vistage Small Business CEO survey
Economic confidence among CEOs of small businesses has recovered from recent declines, according to a survey by Vistage and The Wall Street Journal conducted in May 2019. The survey revealed an increase in the number of respondents offering positive sentiments about current economic conditions than prior months.
The WSJ/Vistage Small Business CEO Confidence Index for May was 102.4, a slight improvement from 99.8 last month and a marked improvement from January’s recent low of 95.2. Despite this gain, the index is still 10 points from 112.4 recorded last May.
Although small business CEOs voiced more positive expectations for economic growth during the year ahead, more CEOs still anticipated worsening conditions (25%) than improving conditions (19%).
Not all factors that comprise the index increased over last month. There were slight dips in anticipated revenue and profit growth, which may be due to impacts of tariffs across the United States.
“The diminished revenue and profit picture may have been due to the collapse of trade negotiations and the imposition of tariffs,” says Dr. Richard Curtin, an economist from the University of Michigan who analyzed the 664 responses to the survey. “While the impact on the entire U.S. economy will be slight, the impact on an individual firm could be substantial.”
“While the tariff induced increases in prices are expected to be passed on to the consumers of their product or services, higher prices also act to shift demand and lower overall demand, and to increase the prices of non-imported goods,” Curtin explains. “If the trade wars persist, the survival of some small firms will depend on their entrepreneurial ability to quickly adapt.”
Overall, the small gains in hiring and planned fixed investments signals that most firms anticipate continued strong demand for their products or services in the year ahead.
Download the May report for more perspectives from small business CEOs, including:
- Economic sentiment on the recent and future performance of the U.S. economy
- Revenue and profitability expectations
- Expansion plans for hiring and investments