Small business owners are feeling more confident even as the economy struggles to return to a more robust level of growth.
According to the latest reading of the Wells Fargo/Gallup Small Business Index, small business optimism improved nine points since the second quarter of 2013 and 36 points since the fourth quarter of 2012, to a positive 25. While still below pre-recession levels, the score is the highest it has been in five years.
The index score can range from negative 400 (the most negative score possible) to positive 400 (the most positive score possible). A score of zero indicates that small business owners, as a group, are neutral about their companies.
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 market, Doug Case, Wells Fargo small business segment manager, said in a statement.
Business owner optimism over access to credit drove the jump in the index score. More than one in four business owners (28%) said they expect credit to be very or somewhat easy to obtain in the next 12 months, up from 24% in the second quarter of 2013.
One in four reported an increase in capital spending in the past 12 months, and almost as many (26%) said they are planning to increase spending in the next 12 months.
The 10-year index gauges business owner perceptions of their present situation and their future expectations in six key areas: financial situation, cash flow, revenues, capital spending allocation, hiring and credit availability.
The latest index score is based on telephone interviews with 602 small business owners across the country conducted July 22 26, 2013.