Small Business Optimism Falls Sharply, Still High
Economic sentiment among American small business owners fell to its lowest point since November this month. Optimism, which leveled out in May following a six-month rise, dropped by two points (from 66 to 63.5) coming into September — the biggest month-to-month drop since February of 2016.
While sentiment remains relatively high — optimism levels were around four points lower in 2015 than they are today — the scale of drop is notable.
Top Problems in August
The question of how to acquire new customers was high on small business owners’ minds this month, ranking number one on the list of potential business concerns. Also high on the list were access to health care costs and health care, and competition from other business owners.
Government regulation, interest rate and labor concerns — all regular fixtures in news stories about the U.S. economy — ranked much lower on small business owners’ lists of concerns.
The Industry Snapshot
While overall sentiment amongst most small business owners on Thumbtack dropped in August, small business professionals in the pet care, home improvement, and transportation industries reported feeling more optimistic about their future financial outlook than they did in July.
Professionals in these industries also reported higher hopes for their business’s future profitability and for economic conditions in the U.S. generally. Pros in transportation and pet care also report plans to expand their headcount.
The Geographic Snapshot
Overall economic sentiment was highest in the Northeast this month — the only region of the U.S. where optimism increased coming into September. While the Northeast rode into a three-month high, the Midwest sank into a ten-month low, following a sharp drop in July.
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.