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Small Business Confidence Jumps12-08-16 | Economic News

Small Business Confidence Jumps

Following Presidential Election

Small business optimism is now at its highest level since January 2008, a result that the authors of the Q4 2016 Wells Fargo Small Business Survey credit mostly to post-election exuberance.

Coincidentally or not, the latest Wells Fargo/Gallup Small Business Index was conducted shortly after the election results were announced and the numbers showed an impressive quarterly gain of 12 points, which has only been accomplished or bettered nine times since the survey's inception in 2003.

The fourth quarter reading of 80 is not only an increase of 26 points over last year, it marks the index's highest level since January 2008 as the economy was sliding into recession, and one of the largest quarterly gains in its history. Also, since most large prior jumps happened early in a recovery process, this increase occurring late represents a bit of an anomaly according to the Wells Fargo Economic Group.

A statement released by the organization noted earlier surveys indicated small business owners were watching the presidential election closely and planning on voting in a much greater proportion than the population as a whole.

Underscoring this were past surveys' findings that 51 percent of small business owners believed that the actions taken by the new president and Congress would make their company better off, and 81 percent wanted these policymakers to focus on reducing or simplifying taxes. Other top concerns cited were reforms to healthcare and the Affordable Care Act, relief from government regulation and actions that would increase energy production.

One other important result in the Q4 2016 Survey was that all of the improvement in its final tally was due to the 17-point gain in expectations as the "present situation" index was down five points.