Small business owners optimistic

Northwestern Financial Review, Feb 15-Feb 28, 2007

Small business owner optimism reached new heights during fourth quarter 2006 according to the Wells Fargo/Gallup Small Business Index. The index is calculated based on a nationwide survey of small business owners conducted by the Gallup Organization and sponsored by Wells Fargo.

"While many economists are forecasting a weaker economic environment for 2007, small business owners are, according to the results, expressing no signs of an economic downturn," said Scott Anderson, senior economist at Wells Fargo. "These optimistic findings indicate expectations for a rebound in activity this year, as the forces that have been inhibiting growth prospects - such as rising energy prices and interest rates, and stagnant wage growth - reverse course and begin supporting future demand."

Looking ahead, many small business owners are optimistic about future revenue growth. Of the respondents surveyed, 63 percent expect revenues to increase and 75 percent expect their cash flow to be in good standing in 2007.

"Small business strength and optimism is reflected in our overall lending to small businesses as well as increased sales of our Business Services Packages," said Rebecca Macieira-Kaufmann, executive vice president and head of Wells Fargo's small business segment. "Based on the latest CRA data our small business lending grew by more than 30 percent year-over-year. Our Business Services Package sales increased by over 50 percent. This growth shows that small business owners are looking for both capital and for a full suite of financial services to better support their needs."

Small business owners' assessment of their current business situation is at its highest since the Index began in August, 2003. Small business owners indicate even more optimism about how their businesses will perform in 2007.

Results are based on telephone interviews with approximately 600 small business owners nationwide conducted November 9, 2006 through November 29, 2006. The margin of sampling error is plus or minus 4 percentage points.