Small Business Optimism Improves to Highest Levels since Great Recession, but Recovery is Slow

  Small Business Optimism Improves to Highest Levels since Great Recession,
  but Recovery is Slow

    Wells Fargo/Gallup Small Business Index 10^th anniversary survey shows
                       improvement in access to credit

Business Wire

SAN FRANCISCO -- August 20, 2013

Small business optimism is the highest it has been since third quarter 2008,
according to the latest Wells Fargo/Gallup Small Business Index conducted July

The Wells Fargo/Gallup Small Business Index improved 9 points since second
quarter and 36 points since the fourth quarter of 2012, to a positive 25
(+25). A major driver of this improvement is business owner optimism around
availability of credit now and in the future. While it’s well below
pre-recession levels, the Index score is the highest it has been in five
years. In August, the Index marks its 10^th anniversary of measuring U.S.
small business owner perceptions of the economy and business impact.

“For 10 years, the Small Business Index has taken the pulse of small business
owners in America,” said Doug Case, Wells Fargo small business segment
manager. “The survey has shown a slow and uneven recovery for small
businesses, and this quarter we continue to see business owners express
cautious optimism as economic trends improve, such as a strengthening housing

Access to Credit

Small business owners said they feel more optimistic about their ability to
access credit over the next year. In the survey, 28 percent of small business
owners said they expect credit to be very or somewhat easy to obtain in the
next 12 months, up from 24 percent in the second quarter of 2013 and the
highest percentage since 2009. Thirty percent said they expect credit to be
difficult to obtain in the next 12 months – down significantly from the 36
percent recorded last quarter and the lowest this measure has been in five

Housing Impact on Small Businesses

The July survey asked business owners about today’s real estate and housing
market, and its impact on their businesses. A majority of small business
owners (57 percent) said they have seen an overall improvement in the housing
market in their area. At the same time, 42 percent reported that their
business relies either somewhat (22 percent) or a great deal (20 percent) on a
strong housing market. Moreover, 45 percent indicated that a rise in housing
prices would improve their business’s sales either somewhat (33 percent) or a
great deal (12 percent).

Capital Spending

In the most recent survey, 25 percent of small business owners reported an
increase in capital spending in the past 12 months. Additionally 26 percent of
business owners said they are planning to increase spending in the next 12
months, consistent with last quarter’s results. The number one reason business
owners cited for not making a capital investment was continued concern about
the overall state of the economy (64 percent) followed by uncertainty in the
future of their business (57 percent).

Small Business Index Key Drivers

Wells Fargo, together with Gallup, surveys small business owners quarterly
across the nation to gauge their perceptions of their present situation (past
12 months) and future expectations (next 12 months) in six key areas:
financial situation, cash flow, revenues, capital spending allocation, hiring,
and credit availability.

Index Scores: Q3 2012 – Q3 2013

                    Overall Index   Present           Future
                      Score             Situation           Expectations
Q3 2013
                    +25             +4                +21
(surveyed July
Q2 2013
                    +16             +2                +14
(surveyed April
Q1 2013
                    +9              -2                +11
(surveyed January
Q4 2012
                    -11             -10               -1
November 2012)
Q3 2012
                    +17             -1                +18
(surveyed July

10 years of Wells Fargo/Gallup Small Business Index


  *Q3 2003: The Small Business Index debuts with a score of positive 69
  *Q4 2006: Index reaches highest score at positive 114 (+114).
  *Q2 2008: Index falls to positive 48 (+48) after 18 consecutive readings at
    or near positive 100 (+100).
  *Q1 2009: Index drops 14 points and falls into negative territory (-4) for
    the first time in the survey’s history in the midst of the recession.
  *Q3 2010: The lowest reading for the Index is recorded at negative 28
  *Q1 2011: Index begins to see improvement and climbs into positive
    territory with a score of positive 12 (+12).
  *Q3 2013: Index rises to positive 25 (+25), the highest level of optimism
    in five years.

Infographic: Wells Fargo/Gallup Small Business Index Q3 2013

Note: Complete survey results available upon request, or visit the Wells Fargo
Business Insight Resource Center.

About the Small Business Index

Since August 2003, the Wells Fargo/Gallup Small Business Index has surveyed
small business owners on current and future perceptions of their business
financial situation. The Index consists of two dimensions: 1) Owners’ ratings
of the current situation of their businesses and, 2) Owners’ ratings of how
they expect their businesses to perform over the next 12 months. Results are
based on telephone interviews with 602 small business owners in all 50 United
States conducted July 22-26, 2013. The overall Small Business Index is
computed using a formula that scores and sums the answers to 12 questions —
six about the present situation and six about the future.An Index score of
zero indicates that small business owners, as a group, are neutral -- neither
optimistic nor pessimistic -- about their companies’ situations. The overall
Index can range from -400 (the most negative score possible) to +400 (the most
positive score possible), but in practice spans a much more limited range. The
margin of sampling error is +/- four percentage points.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified,
community-based financial services company with $1.4 trillion in assets.
Founded in 1852 and headquartered in San Francisco, Wells Fargo provides
banking, insurance, investments, mortgage, and consumer and commercial finance
through more than 9,000 stores, 12,000 ATMs, and the Internet
(, and has offices in more than 35 countries to support the
bank’s customers who conduct business in the global economy. With more than
270,000 team members, Wells Fargo serves one in three households in the United
States. Wells Fargo & Company was ranked No. 25 on Fortune’s 2013 rankings of
America’s largest corporations. Wells Fargo’s vision is to satisfy all our
customers’ financial needs and help them succeed financially. Wells Fargo
perspectives are also available at

Wells Fargo loans more money to America’s small businesses than any other bank
(2002-2011 Community Reinvestment Act government data) and is a leading lender
to women- and diverse-owned businesses. With the nation’s largest network of
retail banking stores, and an award-winning online library of videos, articles
and webcasts known as the Business Insight Series
(, Wells Fargo provides business owners
with timely advice and information to educate and help them succeed
financially. For more information, or to speak with a Wells Fargo banker,
visit or call the National Business Banking Center at

About Gallup

For more than 70 years, Gallup has been a recognized leader in the measurement
and analysis of people’s attitudes, opinions and behavior. While best known
for the Gallup Poll, founded in 1935, Gallup’s current activities consist
largely of providing marketing and management research, advisory services and
education to the world’s largest corporations and institutions.

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Wells Fargo & Company
Alice Hartnett, 704-715-9115 (Media)
Jim Seitz, 612-316-2447 (Media)
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