Small Biz Index: Future Expectations Show Optimism

Wells Fargo/Gallup Small Business Index,
See Chart here:

According to the Wells Fargo/Gallup Small Business Index, surveyed April 1-14, small business owners’ optimism for the future rose for the first time since 2007. The “future expectations” (next 12 months) score rose nine points (to 10) while the “present situation” score dropped 6 points to negative eleven (-11). These metrics comprise the overall Index score, which reflects six key measures: financial situation, cash flow, revenues, capital spending, job hiring and credit availability.

Responses to questions about “financial situation” and “capital spending” contributed to the increase in the future expectations score; Business owners with “very good” or “somewhat good” financial situation expectations increased 11 percent from last quarter’s survey results. Expectations for “a little” or “a lot” of increase in capital spending rose 44 percent from last quarter.

The overall small business owner optimism score rose to -1 (negative one). Although statistically insignificant (margin of sampling error is +/- 4 points), this is a three point increase from the previous survey’s score -4 (negative four), surveyed January 22-February 2. A score of zero means small business owners, as a group, are neutral — neither optimistic nor pessimistic — about their companies’ situations. The index high of 114 occurred in November 2006.

For the last 24 quarters, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on current and future perceptions of their business financial situation. The Index consists of two dimensions: 1) Owners’ ratings of the current situation of their businesses and, 2) Owners’ ratings of how they expect their businesses to perform over the next 12 months. An Index score of zero indicates that small business owners, as a group, are neutral — neither optimistic nor pessimistic — about their companies’ situations. Results are based on telephone interviews with 602 small business owners nationwide conducted April 1- April 14, 2009. The Overall Small Business Index is computed from a formula that scores and sums the answers to 12 questions—6 about the present situation and 6 about the future. The Overall index can range from -400 (the most negative score possible) to +400 (the most positive score possible), but in practice takes on a much more limited range. The margin of sampling error is +/- 4 percentage points.

About Gallup

For more than 70 years, Gallup has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.

About Wells Fargo

Wells Fargo & Company is a diversified financial services company with $1.3 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,400 stores, over 12,000 ATMs and the internet ( across North America and internationally.

Wells Fargo is America’s #1 small business lender in total dollar volume according to the most recent Community Reinvestment Act data (2007) and the #1 SBA 7a national bank lender in total dollar volume (2008). Wells Fargo has loaned close to $39 billion to women, African American, Latino and Asian business owners since 1995. For more information, speak with a Wells Fargo banker, visit or call the National Business Banking Center at 1-800-CALL-WELLS.

Note: Survey results available upon request.

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