Revenue challenges. Frustration with regulation. Economic uncertainty.
Sounds like a convention of bankers, but instead these are the complaints of their bread-and-butter commercial customers: small-business owners.
Small-business optimism has slipped slightly on concerns about growth prospects and the presidential election campaign, according to a Wells Fargo and Gallup survey conducted in early April. The Wells Fargo/Gallup Small Business Index produced a reading of 64, three points lower than in early January and the same as a year earlier. The latest results were released Wednesday.
The survey found that the economic environment for small business is uneven and that optimism is stuck in a holding pattern. While business owners’ estimates of cash flow fell to levels reflective of the final two quarters of 2015, other measures that make up the overall index score, including financial situation, revenues, capital spending allocation, hiring, and credit availability, were basically flat.
“One of the frustrations that businesses have had is that it’s been very tough to grow top-line revenue,” Mark Vitner, managing director and senior economist for Wells Fargo, said in an interview.
In identifying the most important challenges facing their businesses, 16% of owners said they had major concerns about attracting customers and finding new business. Their other top concerns were the economy and government regulations, both at 10%, and hiring and retaining quality staff, at 9%.
“While small-business optimism over the past year has been higher than at any point since 2008, many business owners remain cautious about today’s economy and the year ahead,” Lisa Stevens, Wells Fargo’s head of small business, said in a press release announcing the results.
The survey also asked business owners about the 2016 presidential election and found that while 50% believe the outcome of the race will have a major impact on their businesses, they expressed significant doubt that the candidates are addressing their concerns. Only 28% of survey respondents said the presidential hopefuls are discussing issues that are most important to them as small-business owners.
Asked what key issues they want the candidates to discuss, 22% of respondents said taxes, 12% cited the economy, and 9% mentioned health care. Among the business owners surveyed, 92% expect they will vote come November.
Vitner partly attributed the drop in the latest index score to the timing of the surveys, which are taken at the start of each quarter.
“Our first-quarter survey was a bit of an outlier because it was taken before we had that long slide in the stock market,” Vitner said in an interview. “And so I think that may have caused us to have a better reading the first quarter than … some other surveys.”