For the second consecutive month, economic optimism comes in at a historically high level. Overall business confidence among the 3,575 small business owners Thumbtack surveyed in May soared to its third highest point since the survey first began in December 2012—coming in just a percentage point behind last month’s record-breaking peak.
Overall Economic Sentiment
- As of May, small business optimism stands at 66.7%
- 32.3% of small business owners say they are actively looking to hire new employees, compared to 34% in April
- 62.4% of small business owners plan to further invest in their business, up from last year’s 61% average
Warm Weather Hires Are Up (Way Up)
With summer on its way, hiring trends in traditionally warm weather industries continue to climb. Most notably, small business owners in landscaping, lawncare, moving and transportation reported plans to expand their payroll coming into June.
“We’re constantly hitting the pavement looking for more work, and as we do we need to hire more. That’s the name of the game. If you’re not growing you’re dying,” says Charles M., who has owned an outdoor landscaping business in Seven Valleys, Pennsylvania since 2012.
And although Charles describes his team as among the best he’s assembled, he admits that finding employees can be a struggle. “It’s challenging finding the kind of quality people that we need. We find that the best landscapers aren’t looking for jobs—they’re either locked into other companies in the long term or running their own side business,” Charles explains.
As the Labor Market Surges, Hiring Strains
Charles isn’t the only one in his industry struggling to find the employees his business needs. Daren M., a tree trimming and removal specialist in Ballwin, Missouri, traces his hiring difficulties to a larger systemic issue.
“As important as university education is, I think it’s overpromoted. That’s why there aren’t enough skilled workers. There are a lot of good jobs out there for high quality laborers but not enough focus on it,” says Daren.
Turnover is also a problem, which Daren traces back to the shortage of training programs. “Finding steady laborers in my industry is hard. Typically, they’re the guys who tried college and failed or finished and are buried in loans. This job is their fallback so they’re not as concerned with gaining the skills they need.”
Partisan Influences: The Economy at Large
Political ideology continues to play a major role in shaping how small business owners feel about their economic futures, and for the fourth straight month, self-identified liberals, moderates, and conservatives in our survey reported markedly different levels of confidence in how they viewed the broader economy.
While 80 percent of conservative small business owners feel positive about the U.S. economy, only 68 percent of moderates and 58 percent of liberals agree. And while this difference is considerable, the ideological gap has in fact narrowed in the past few months, as conservatives’ economic expectations leveled out. In February, this gap was nine points wider, with 86 percent of conservatives, and only 55 percent of liberals feeling positive about the economy.
Partisan Influences: The Small Business Economy
However, when asked to consider their own business’ near-term success, the ideological gap all but disappears. For example, less than one percentage point separates liberals, moderates and conservatives on the question of how their business will fare in the next three months (all hover at around 89 percent positivity). And when we add all factors to determine small business owners’ overall economic sentiment score, the three groups are within 4 percentage points of one another—liberals at 65.96, moderates 69.29, and conservatives 68.95—a difference that would essentially zero out, if not for variation in how each group views the economy at large.
We see these two economies at work in feedback from John L., a foundation repair specialist in Dallas. While John is concerned about the Trump administration’s policies and how they might impact the country’s economy, he reports that this instability isn’t stopping his own business from reaching record-breaking levels of success. “We’ve been breaking year-over-year records every month through May this year. We’re doing 80 percent more business than we were this time last year,” says John.
And with this growth comes plans to expand. As John explains: “I’m getting to the stage where I don’t have the time to keep doing what I’ve been doing. I’ll need to hire a manager and bring my CAD designer in full-time in a higher paying role. At this rate, I should be able to hire both in the next two quarters.”
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.