U.S. Bank 2014 Small Business Survey Shows for the First Time in Five Years a Majority of Owners Are Optimistic about the

  U.S. Bank 2014 Small Business Survey Shows for the First Time in Five Years
  a Majority of Owners Are Optimistic about the Economy

Business Wire

MINNEAPOLIS -- April 24, 2014

For the first time in five years, a majority of small business owners are
optimistic about the economy, and business owners in regions of the country
that last year were most concerned about the economy are now looking up
according to results of the 2014 U.S. Bank Annual Small Business Survey.

Now in its fifth year, the U.S. Bank Annual Small Business Survey measured the
opinions of more than 3,000 small business owners who shared their views on
the state of the national and their local economy today, general business
conditions and challenges, and their outlook for 2015.

“We’re pleased to see small business optimism at a five-year high,” said John
Elmore, vice chairman for community banking and branch delivery at U.S. Bank.
“The survey results confirm what we’re hearing in the field. Business is
strong, and while uncertainty remains and is dampening their plans to hire and
expand, their outlook for 2015 is trending positive.”

The Economy
In 2014, 56 percent of small business owners said they feel that the national
economy is in a state of recovery or expansion, up significantly from 46
percent last year. In 2010, nearly nine out of 10 small business owners said
the U.S. economy was in a recession. This year, that number reached a
five-year low, with only 34 percent of respondents saying they believe the
economy is still in a recession.


Do you believe the U.S. economy is in a recession, recovery, expansion, or are
you unsure?
             Recession         Recovery        Expansion        Unsure
2013          43%               45%             1%               10%
2014          34%               52%             4%               10%
Note: percentages not equaling 100% are due to rounding.


States or regions in which small business owners had the strongest rebound in
sentiment about the U.S. economy since last year include Arizona (14 percent),
Southern California (15 percent), Washington (15 percent) and Missouri (12
percent).

Looking ahead to 2015, more small business owners are hopeful about the
potential for economic growth. Fewer business owners think the economy will be
in recession in 2015 (41 percent), and while fewer think the economy will be
in recovery in 2015, significantly more believe the economy will be expanding
in 2015 (16 percent) than those who believe it is expanding now (4 percent).


Percent who believe the U.S. economy will be in a
recovery/recession/expansion/unsure next year:
                Recovery        Recession       Expansion       Unsure
Current          52%             34%             4%              10%
outlook
2015 outlook     41%             26%             16%             17%
                                                              

Business Conditions
More than two-thirds of business owners (70 percent) believe their business is
in good financial health today, up from 64 percent five years ago. The
percentage of those who report higher revenue continues to hover between 25-30
percent, which has been the case since 2010. The percentage of business owners
who said they expect revenue to be higher next year dropped significantly in
2013, and increased only slightly in 2014.


Percent who describe the financial health of their business as good, very good
or excellent:
2010             2011            2012            2013            2014
64%              64%             69%*            67%             70%

Percent who report higher revenue this year compared to last year:
2010             2011            2012            2013            2014
25%              26%             29%             29%             30%

Percent who expect revenue to be higher at this time next year:
2010             2011            2012            2013            2014
46%              49%             46%             41%*            42%
                                                           

Those who say they plan to hire, make capital expenses or who have needed to
seek financing for their business remains below 30 percent.


Percent who expect to increase the number of people working for them over the
next 12 months:
2010             2011            2012            2013            2014
17%              22%*            20%             16%             20%

Percent who are likely to make a capital expenditure to expand their business
in the next year:
2010             2011            2012            2013            2014
28%              30%             32%             28%             29%

Percent who have borrowed money or tried to borrow money for business purposes
over the last 6 months:
2010             2011            2012            2013            2014
19%              20%             19%             13%*            13%
                                                           

* Note: Statistical significance is based on variance to prior year at 95%
confidence.

Top Issues Facing Small Businesses
Last year, with the fiscal cliff and government shutdown unfolding, more than
one in five saw the federal budget deficit as the most important national
issue. This year, only 14 percent of owners list it as their top concern, down
8 percent from 2013. While no single issue is top on the minds of owners,
healthcare is now tied with the federal budget/deficit as the primary concern,
followed by taxes.


Percent who say one of the following is their most important national issue:
2013                                      2014
1. Federal budget deficit/federal         1. Federal budget deficit/federal
debt (22%)                                  debt (14%)
2. Jobs/unemployment (13%)                1. Healthcare/Medicare (14%)
3. Healthcare/Medicare (12%)              3. Taxes (12%)
                                        

Technology
Small business owners nationwide are ahead of the curve when it comes to
technology. According to survey, they are more likely than the general
population to define themselves as innovators and early adopters of new
technology, and mobile capabilities are among the ways they are using it to
get an edge. Across the country, 75 percent of small business owners said they
have integrated mobile technology into their business strategy, whether
through mobile banking, social networking, web design, payments or other uses.
Among them, business owners said that offering a mobile-friendly website added
the most value for their business.

In addition to looking to new technology to position their businesses in the
marketplace, 64 percent of small business owners maintain a social media
presence to make connections, find talent or market their business. Those who
maintain a presence said that Facebook was most effective, followed closely by
LinkedIn.

Methodology
The survey was conducted by Market Probe via an online sample in the first
quarter of 2014. They surveyed 3,173 small business owners with less than $10
million in annual revenue. To facilitate differences in select U.S. Bank
markets, the study was conducted in two phases. The first phase comprised
1,000 national responses to serve as a baseline across U.S. Bank’s 25-state
footprint. The second phase represented an over-sample of 2,173 interviews in
Arizona, California, Colorado, Illinois, Minnesota, Missouri, Ohio, Oregon,
Washington and Wisconsin. Half of the respondents had businesses with more
than $200,000 in revenue, and half had less than $200,000 in revenue. The
survey highlights responses that are statistically significant based on
variance to national, prior year, or demographic cohort results, with 95%
confidence.

About U.S. Bancorp
U.S. Bank’s commitment to the small business owner extends beyond banking and
lending. U.S. Bank’s small business website, U.S. Bank Connect™, offers advice
and networking opportunities to business owners of varying sizes and stages of
their business life cycle. Follow Connect on Facebook or Twitter. For more
information on U.S. Bank’s full service offering to small businesses visit
www.usbank.com/smallbusiness.

U.S. Bancorp (NYSE: USB), with $371 billion in assets as of March 31, 2014, is
the parent company of U.S. Bank National Association, the 5th largest
commercial bank in the United States. The company operates 3,083 banking
offices in 25 states and 4,878 ATMs and provides a comprehensive line of
banking, brokerage, insurance, investment, mortgage, trust and payment
services products to consumers, businesses and institutions. Visit U.S.
Bancorp on the web at www.usbank.com.

Contact:

U.S. Bank Public Relations
Teri Charest, 612-303-0732
teri.charest@usbank.com
 
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