NEW YORK (AP) — Small business owners' optimism is showing more signs of ebbing.
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That's one of the findings of a semiannual survey of owners released Monday by Bank of America. Forty-eight percent of the 1,504 owners surveyed predicted that the national economy will improve over the next year, down from 55% in the survey taken last fall. The drop in optimism extends to owners' view of their local economies — 51% expect an improvement versus 54% in the previous survey.
The latest survey, conducted in February, is in line with surveys taken earlier this year by Capital One, the U.S. Chamber of Commerce and MetLife and Wells Fargo that showed small business optimism slipping along with expectations for the economy.
The creeping pessimism was also reflected in owners' modestly scaled-back plans to expand. Sixty-seven percent of the owners Bank of America surveyed said they planned to expand their companies in the year ahead, down from 69% in a survey taken a year earlier. And 56% said they planned to expand over the next five years, down from 60% a year earlier.
The number of owners who plan to hire increased to 24% from 22% a year earlier. However, the number of owners surveyed by Bank of America who plan to create jobs is smaller than in other surveys.
Owners' pessimism may be fueled by concerns about the nation's political environment. It was cited by nearly two-thirds of the owners as one of their top economic concerns, surpassed only by health care costs. Rising interest rates, the stock market's recent volatility and consumer spending were all cited as economic concerns by nearly half the owners.
Owners may also be a little less optimistic because the new tax law hasn't given their companies the boost they expected. Twenty-eight percent said the government's new tax policy has been positive for their companies, compared to 45% who had a positive outlook about tax policy a year earlier. Half said tax policy was neutral for their businesses, up from 39% who a year ago forecast a neutral impact, and 21% said tax policy has had a negative impact on their companies, up from last year's 15%.