As recession fears continue to diminish, small-business owners are particularly optimistic. Nearly two-thirds — 64% — of small-business owners (SBOs) surveyed by Capital One (COF) are calling current business conditions good or excellent.
Margaret Donnell, head of Customer Experience for Capital One’s Small Business Bank, told Yahoo Finance that “it's an all-time high since our Great Recession, and up five percentage points from our last survey.” Recession fears are down five points, according to the survey.
Capital One regularly updates its Small Business Growth Index, which tracks sentiment among SBOs relating to a broader economic outlook, recession concerns, plans for hiring and growth, and more.
Donnell explained that “recession fatigue” could be assuaging some fears, but that the continued talk of a potential downturn has kept SBOs “preparing for the unexpected.”
“What we're hearing from small-business owners is that now is the time to prepare,” she said. “Many of them are consulting with financial advisors, business bankers, thinking about: when they have that unexpected cash flow need, how they prepare for it. We are headed into a lower interest rate market, so now is a good time for them to secure funding.”
Amid lower recession fears, SBOs are also showing continued strength in hiring. Thirty percent plan to hire in the next six months.
“We're actually seeing more and more small business owners trend towards contingent workers,” Donnell said “They're able to hire as they need, but also need to pare down and they can do that.”
Demographically, millennial (50%), minority (40%) and women (35%) small-business owners are more likely to have plans to hire than other SBOs, and the sentiment divide is noticeable among generations.
“Millennials are some of our more optimistic group,” Donnell told Yahoo Finance. “They actually entered the workforce at a time when they were going through a recession, and many leaned into being entrepreneurs themselves. So they remember that experience and they are prepared for it — or at least they tell us they are.”
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