The Wells Fargo/Gallup Small Business Index for the third quarter of 2018 found small-business owners are more optimistic now than ever before. The latest quarterly survey came in with an overall score is +118, higher than any point in the index’s 15-year history.
For the first two quarters, or Q1 and Q2, the index came in at +107 and +106, respectively. The level the index now sits at is just above the previous record-high +114 measured in 2006.
The index, which gauges small-business owners’ attitudes about factors impacting their businesses, rose due overall increases in most of those areas.
For instance, 78% of small-business owners rated their current financial situation as very or somewhat good, compared to 73% in Q2 2018. As far as cash flow over the previous 12 months, 69% rate it as very or somewhat good, compared to 63% in the previous quarter.
Cash flow expectations in the next 12 months — 77% very or somewhat good, compared with 72% last quarter. Credit availability in the next 12 months — 49% say it will be very or somewhat easy to get credit, versus 44% in the second quarter.
Under the Trump Administration, major and widely-cited economic indexes have hit all-time highs, including the Small Business Optimism Index conducted for the National Federation of Independent Business (NFIB).
With taxes and the regulatory environment improving, the NFIB Small Business Optimism Index for May hit the highest level ever in 45 years.
However, as with the NFIB Index, the Wells Fargo/Gallup Small Business Index found the skills gap to be a challenge. “Hiring qualified/good staff and retaining them” was cited by 18% of small-business owners.
While the Trump Administration has launched an initiative to combat the skills gap — which is essentially when the supply of qualified workers doesn’t keep up with their demand — the problem persists.
In the NFIB, 55% — and 87% of those hiring or trying to hire — reported few or no qualified applicants for the positions they were trying to fill.
“Further, 35% of owners expect that the number of jobs at their business will increase over the next year, the second-highest reading on this measure in the history of the index,” Frank Newport of Gallup wrote. “This optimistic anticipation of new hires helps explain why many owners report that being able to find and hire good workers is their top challenge.”
The survey does allow for an open-ended response to the question and, when grouping those relating to government policies and regulations, it accounted for 24%.
Results are based on telephone interviews with a random sample of 604 U.S. small-business owners in all 50 states, conducted July 11-18, 2018. For results based on the total sample of small-business owners, the margin of sampling error is ±4 percentage points at the 95% confidence level.