Economic sentiment and hiring expectations among American small business owners appear to have hit a holding pattern in July. Following a historical high-point in April, both optimism and expected hiring continue to level-out, suggesting that small business owners across the country are returning to business as usual.
Overall economic sentiment among the 3,871 small business owners we surveyed was down slightly in July, the third-straight slip since April 2017. Still, at 65.8, optimism in July remains significantly higher than the yearly average in both 2016 (64.1) and 2015 (64.8).
Hiring Slows, Remains Historically High
The number of small businesses on Thumbtack who are hiring also dipped slightly in July. Forty-five percent of small business owners who already employ full-time employees reported that they were looking to expand their payroll, compared to 48 percent in June. The dip is most pronounced among professionals in the moving and transportation industries, where hiring rates dropped from 56 percent in June to 48 percent in July, as well as in professional services where the percentage of businesses hiring this month fell to 24 percent.
Despite minor slowing, hiring patterns among the small business owners on Thumbtack remain historically high — in July, the percentage of professionals planning to expand their staff increased by four points (43 percent in 2016) year over year.
Regionally, demand for new workers was strongest in Georgia (where 37 percent of small business owners are hiring) and South Carolina (35 percent), and weakest in Maryland, where only 26 percent of all businesses expected to hire new employees in months to come.
But not all those in a place to hire are finding qualified professionals for their open roles. According to Kim V., an event caterer in Colorado, filling positions — even well-paying ones — isn’t easy. “Jobs are so plentiful now that people are less dedicated to the work. If one job doesn’t work out they think that they can just find another. I hear this from friends in all other industries too,” says Kim. With nationwide unemployment near a ten-year low, it’s likely that employers will have increasing difficulty in attracting new workers, at least until wages start to grow. And for now, most of the businesses we’re hearing from report that what they’re paying employees hasn’t yet increased very much.
As we reported last month, how small business owners feel about the larger economy doesn’t always align with how they feel about their business’s financial future. Case in point: while small business owners across the board remain positive about their business’s near-term future this July, the way they feel about the larger economy depends largely on their political affiliation.
Around 78 percent of self-reported Republican small business owners on Thumbtack feel positive about the U.S. economy, compared to 62 percent of Democrats, a gap that’s persisted, even if it’s narrowed, since we first started tracking partisan sentiment following the inauguration of the new administration in January.
Michael S., a self-reported Republican cleaning business owner in Northfield, Ohio explains, “Ever since president Trump was elected business people around here seem to have more confidence. They’re spending more, taking more risks. Whether or not there actually is more money, people are acting as if their pockets are lined.”
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.