Small Business Owners Express Most Optimism Since 2008

Small businesses are the most optimistic they have since July 2008, according to the January numbers from the Wells Fargo/Gallup Small Business Index survey.

The “increase in optimism signals that small business owners are seeing a brighter future,” said Doug Case, Wells Fargo’s small business segment manager, in a statement. “While this economy still presents challenges for many business owners, we are encouraged by expectations for improved revenues, financial situation, and cash flow, which have the potential to drive job growth.”

The Index’s future expectations component now stands at “+15” for January, compared to “-3” in October, and “zero” in November and December.

Some 63 percent of small businesses expect their company’s financial situation to be “very good” or “somewhat good” over the next 12 months, up from 55 percent in the fourth quarter of 2011, the survey found.

In addition, some 49 percent of small businesses said they expect revenues to increase a lot or a little over the next year, up from 37 percent in the fourth quarter of 2011.

Regarding hiring, some 22 percent expect the number of jobs at their company to increase a lot or a little, up from 15 percent at the end of last year. Some 8 percent expect the number of jobs at their company to decrease a lot or a little, down from 13 percent in fourth quarter 2011.

The difference between companies planning to hire rather than the fire is the largest since January 2008, at the start of the financial crisis, the survey noted.

Finally, some 53 percent of businesses expect their cash flow to be very or somewhat good, up from 48 percent in the fourth quarter of 2011.