Business is Shining Bright, Though the National Economy is Cloudy According to Owners
April 25 2016 - 08:00AM
Business Wire
Mobile takes center stage, tech drives trust according to 2016
U.S. Bank Small Business Survey
Small business owners are confident in their business, however
they’re less certain about the national economy than they were last
year. Revenues are good, and they want to hire and expand,
according to newly-released results of the 2016 U.S. Bank Small
Business Annual Survey.
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“Business owners are still in a cautious mode, second-guessing
future decisions,” said Ross Carey, executive vice president and
head of business banking at U.S. Bank. “Business is good, though
they wonder if another shoe will drop in the economy. A little more
time and some clarity around who will be leading our country a year
from now will go a long way in boosting their confidence.”
Confidence in national economy dipsU.S. Bank has been
surveying small business owners for seven years. From 2013 to 2015,
the number of small business owners who felt the economy was
recovering or expanding increased significantly year over year.
This year, confidence dipped, returning to 2014 levels.
Nearly 1 in 3 small business owners believe the national economy
is in recession in 2016, up from only 1 in 5 who said last year
that conditions felt like a recession. They’re still positive
though. A majority (57 percent) of owners say the economy is in
recovery or expansion, however even that number is down from a high
of 67 percent last year. Outlook for 2017 has dipped as well. A
majority (54 percent) see recovery or expansion on the horizon, a
number that shrunk from 67 percent in 2015. One in four say the
economy will be in recession in 2017.
Revenue not hampered by economic viewNearly 75 percent of
small business owners classify the health of their business as
“strong.” Revenues are at or above the previous year for more
businesses in 2016 (34 percent) than in 2015 (24 percent) and
nearly half expect revenue growth in 2017. Approximately 1 in 4
owners have plans to hire, which is the same as last year, though
an improvement over 2014. About 38 percent say they’re ready for
capital expenditures, up significantly over 2015.
Mobile technology takes center stage in business, tech drives
trust in banksMore than 3 in 4 small business owners have
integrated a mobile solution into their overall business strategy,
and even more are using social media to make connections, find
talent, or market their business. Business owners are significantly
more likely to access their bank and make payments with a mobile
device than they were a year ago. More than three in four say banks
offering the most up-to-date technology are more trustworthy.
However, at the end of the day, the human touch is still important
to them – 89 percent say they will do at least some of their
banking in a physical branch in five years.
“Customers want to be able to access the bank through multiple
channels when it’s most convenient for them. However, they also
tell us nothing replaces the human touch – that banker down the
street to talk to or bounce ideas off of from time to time,” Carey
said.
Healthcare changes settling in, future costs still a
questionSmall business owners’ attitudes about the new
healthcare laws remain divided. Half think the long-term impact
will be negative, while the other half are divided between
“positive” and “neither/unsure.” Last year, the number of small
business owners who felt the new healthcare laws would have a
negative impact long term dropped significantly from 61 percent in
2014 to 47 percent in 2015, which is about where it sits today at
50 percent. Concern in 2014 appears to have morphed into acceptance
in 2016. Fewer than half say the new law has resulted in higher
premiums.
Issues on their minds this election yearHealthcare and
taxes are the two top issues on the minds of small business owners
this election year. The last time we elected a president, in 2012,
the top issues to small business owners were healthcare/Medicare
and unemployment. Today, healthcare, terrorism, national security,
taxes and immigration are more important issues to the small
business owner than they were in 2012. More than a quarter of those
surveyed have this message for presidential candidates – lower
taxes for small businesses.
Economic confidence varies by stateSmall business owners’
optimism is often impacted by how their state economy is faring.
Areas where business owners feel the state economy is better than
the national economy are Minnesota, Colorado, Washington and
Northern California. States where business owners feel the state
economy is worse than the national economy -- Arizona, Oregon,
Wisconsin, Missouri and Illinois.
“It’s not surprising that business owners are more positive in
regions where home values are improving, such as Seattle, Colorado
and the San Francisco Bay Area,” Carey said. “We feel good about
the economy if our homes are worth more than we owe. Increased
taxes and minimum wage issues could be impacting results in areas
like Illinois and Oregon.”
Who are the small business owners we talked to?More than
half of the owners we talked to have been in business for more than
10 years, three quarters for more than five. Revenues are mainly
under $1 million and represent a large mix of business segments.
Nearly all have not served in the military. Most have less than 20
employees, and three out of four say their employees are mostly
full time. Most are located in urban or suburban areas, and most
are over age 45. They are almost evenly split, male and female.
U.S. Bancorp (NYSE: USB) with $429 billion in assets as of March
31, 2016, is the parent company of U.S. Bank National Association,
the fifth largest commercial bank in the United States. The company
operates 3,129 banking offices in 25 states and 4,954 ATMs and
provides a comprehensive line of banking, investment, mortgage,
trust and payment services products to consumers, businesses and
institutions. Visit U.S. Bancorp on the web at www.usbank.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160425005200/en/
U.S. Bank Corporate CommunicationsTeri Charest,
612-303-0732teri.charest@usbank.com@usbank_news
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