This is weird: Small business owners are becoming more confident about the U.S. economy at a faster rate than they are about their own businesses, according to survey results (PDF) published today by the National Small Business Association.
The survey, which earlier this summer polled 1,100 small business owners, including NSBA members, indicates that 35 percent of respondents believe the economy is better today than it was a year ago. That’s up from the 21 percent who said the economy was better off when the NSBA asked the same question in July 2012. (Ninety-six percent of respondents had fewer than 100 employees, and 77 percent had $5 million or less in annual sales.)
But business owners’ confidence in their own companies isn’t picking up as quickly: Some 64 percent said they were confident in the future of their own businesses, up from 60 percent in July 2012.
This contrasts with attitudes among executives at midsize companies: They’re more optimistic about their local economies than they are in their national or global outlooks, according to a quarterly survey published last month by the National Center for the Middle Market. That makes sense: midsize companies, which the NCMM defines as having from $10 million to $1 billion in revenue, tend to rely on local suppliers and customers, and they exert greater control closer to home.
“If you ask them their view on the global economy, they’re very negative,” Dan Henson, chief executive officer of GE Capital Americas (GE), said about attitudes at midsize companies last year. “You pull back to the U.S. and they’re still fairly down. You ask them about their industry and they feel a little better. Then you ask them about their own company and they’re confident in their ability to maneuver.”
Why doesn’t the same hold true for small businesses? NSBA Chairman David Ickert and Chief Executive Officer Todd McCracken suggest that a quiet news cycle has kept fears regarding the broader economy in check in a letter (PDF) accompanying Tuesday’s report:
A likely cause for this discrepancy is the fact that media reports signaling massive economic failures, such as the debt ceiling and sequestration, have been fewer in recent months, and despite Congress’ continuing inability to get much done—the focus of their failures has not necessarily been economic in nature. Despite the lower prevalence of negative economic news, the fact remains that times are still very difficult for small businesses and there is growing hesitation by small businesses, even those who have a better economic outlook than six months ago, to take on the risk of growth or hiring.