Economic optimism among small business owners soared to a record-setting peak this month, reaching its highest level on record. And with this optimism comes growing headcounts—34 percent of the 3,468 of small business owners we surveyed reported that they had either hired or attempted to hire one or more new employees in the last three months. For reference, according to our data that’s 7 percent higher than at any other point in the last two years.
Small Business Owners’ Perception of Expected Employment
- 61% of small business owners feel positively about their hiring plans
- 6-month growth streak after low point through spring and fall 2016
- Expectations at their highest level since early 2016
Overall economic confidence reached its highest level in our over four years of data this month for small business professionals working in the cleaning, events, home improvement, photography, and professional services industries.
Economic confidence is at a 15-month high in 12 of Thumbtack’s 30 biggest state markets: Arizona, California, Florida, Indiana, Kentucky, Minnesota, Nevada, New York, Ohio, Pennsylvania, South Carolina, and Texas.
Exceptions to the Hiring Bump
While economic optimism has had a direct influence on hiring activity this month, not all industries are experiencing this bump equally. Despite booming confidence in the home improvement, photography, and professional services industries, economic confidence in landscaping and lawncare, lessons, pet care, and the transportation and moving sectors has actually dropped since the start of the year.
One way to interpret this difference: seasonality. For example, small businesses in the moving and landscaping industries typically have their highest economic expectations around the start of the year and they are now starting to slacken, just like they did this time last year. Similarly, demand for lessons (such as SAT and math tutoring) typically doesn’t peak until the start of the new academic year later in the summer.
Lorie, an ESL tutor in Kansas, told us that business always tends to drop off around this time of the year. But seasonal fluctuations aren’t the only thing suppressing Lorie’s optimism this April—her customer base is shrinking for other reasons. “I work with a lot of international students, and for many of them, their future in the United States is in flux,” she explained.
Overall Economic Sentiment
The surge in optimism this April comes on the heels of last month’s minor downtick, the first of its kind since sentiment first began to rise in October 2016. This month, those numbers climbed to a record-setting high, with sentiment among small business owners rebounding by over 10 percent following a markedly less optimistic fall.
“I’m probably in the best financial situation of my life right now,” says Austin, an electrician in Indianapolis. “People aren’t complaining very much about price these days and the housing market is doing great. I’m doing 4 to 5 home inspections a week.”
One industry where Austin is finding less work? Green energy. “When I was doing commercial work there was talk of renewable energy and I got a special certification to work on turbines. Then green energy kind of disappeared. If there weren’t so much government pushback, green energy could be booming right now, and that would be great for my business.”
For Mike, a handyman in Milford, Michigan, things are less clear. “In Michigan, any time you listen to the news they’re talking about the economy and the turnaround. Our governor always says we’re doing great and we’re in the safe zone.”
Still, Mike is conservative about how and when he invests—especially when it comes to thinking about hiring. “It’s hard to think about paying an employee during the slow times, and in the same light, I wouldn’t want them to not be able to get paid because they’re waiting for a job,” Mike explained. “So I’ve been thinking about taking in a partner instead. If things are slow, he’ll go through the same hump that I will. Every year there are roughly three months that are tough to get through and it’s as much mental as it is financial. Having a partner in that could be helpful.”
About the Thumbtack Economic Sentiment Survey
Every month, the Thumbtack Economic Sentiment Survey captures the attitudes and perspectives of thousands of business owners from across the country to gauge how they are feeling about the economy and their businesses. Now in its fifth year, this survey provides a unique vantage point on the economy, as respondents are largely mobile service professionals with five or fewer employees who operate across the United States. Because they are hard to reach, these professionals are frequently overlooked in other surveys of small businesses.