Small Business Optimism Hits Three-Year High

Three out of four (75 percent) small-business owners in the U.S. are confident about the future of their businesses, a new economic report shows. This is the highest level of small-business optimism in this country in the past three years and a jump from 64 percent of owners giving future prospects a thumbs-up just three months ago.

Revenue growth was also at its highest point in three years, with 46 percent of small businesses reporting increases, up from 39 percent six months ago, according to the 2011 year-end economic report released by the National Small Business Association (NSBA), the nation's first small-business advocacy organization. The number of companies reporting decreases in revenues declined as well, from 37 percent to 31 percent.

While job growth didn't experience the same kind of bounce—it remained unchanged, with just 22 percent reporting increases—only 23 percent of small businesses reported employment decreases, the lowest level in three years.

While the majority of small-business owners (66 percent) continue to anticipate a flat economy in the coming year, the number expecting a recession was more than halved, at 14 percent, down from 30 percent six months ago. Additionally, the number of small businesses expecting economic expansion in the coming year nearly doubled from 12 percent to 20 percent in six months.

When asked which issues are most important for policymakers to address, small businesses overwhelmingly ranked reducing the national deficit number one—44 percent, up from 34 percent six months ago—followed by reducing tax and regulatory burdens and reigning in the costs of health care. Along those lines, there was a marked increase among small-business owners who cited regulatory burdens as a major challenge for their business—from 31 percent six months ago, up to 40 percent today.

"Despite some cyclical ups and downs we've seen in the past several years, this report indicates real growth for the small-business community," said Todd McCracken, NSBA president. "Although we are far from where we need to be, it appears that small businesses have turned an economic corner."