A surge in confidence in July and August reached some of the highest levels since the recession started, according to a handful of recent surveys.
For example, the quarterly small-business optimism index from Wells Fargo and Gallup reached its highest level since the third quarter of 2008. Likewise the National Federation of Independent Business showed its fourth-highest index reading since December 2007.
In addition, the Wall Street Journal/Vistage Small Business CEO Survey said that of the 678 business owners surveyed, 73% expect revenues to increase in the next year and 54% expect profitability to improve.
Jim Houser, owner of Hawthorne Auto Clinic Inc., is already seeing an increase in demand for his business in Portland, Ore. His shop has consistently taken in about 15 cars per day since the recession, but the amount customer spent on repairs in an order had dropped 20% from 2007 to 2010. In recent months, though, he has seen the dollar per repair order climb back to pre-recession levels.
“I think people are no longer afraid of losing their jobs … they’re more willing to take care of their cars and buy things like tires and shock absorbers,” Houser said.
But the shift in small-business confidence may be a bit premature when considering the overall economic outlook. Though it is improving, the current economy is still far from robust, with unemployment just above 7% and gross-domestic-product growth behind the long-run average of 3.5%.
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