Economic pessimism declines, buoying small business confidence in Nov. 2019 WSJ/Vistage survey
Overall confidence of small business CEOs rose nearly 8 points since last month, largely driven by a decline in pessimism about the national economy according to the latest survey conducted by Vistage and the Wall Street Journal. The survey, conducted November 4-11, captured input from 654 CEOs and other leaders of small businesses across the United States. The WSJ/Vistage Small Business CEO Confidence Index was 97.8 in November, rising nearly 8 points from 89.9 last month.
In addition to the shift in the outlook for the overall economy, gains were recorded in other factors that comprise the Index. Short term outlook was strong with 68% of small business CEOs expecting increased revenues in the year ahead, a 6-point increase from last month. To support these growth expectations, 60% of CEOs reported plans to increase their workforce.
The proportion of small business CEOs that expect the economy to worsen in the year ahead declined from 43% last month to 29% in November. According to Dr. Richard Curtin, an economist from the University of Michigan who analyzed the data, “A decline in pessimism is usually driven by a reduction in uncertainty, whereas an increase in optimism is typically accompanied by greater certainty. The most likely source of declining uncertainty emanates from the notion that a trade deal is near, at least the first stage; about one-third of small firms reported a negative impact on their business from tariffs.”
Curtin further notes that “Since there is nothing certain about being near a trade deal with China, the November gains may be reversed.”
Download the November report for more perspectives from the analysis including:
• Pessimism about U.S. economy lessens
• Investment and hiring plans post incremental improvements
• Revenue and profit expectations rise slightly