The sixth annual First Citizens Bank Small Business Forecast found that despite uncertainty due to the coronavirus pandemic, many small business owners remain optimistic about the economic outlook for the next two to three years. Of those polled, 66% of respondents are optimistic or very optimistic for the long-term economic outlook, which remains on par with pre-pandemic sentiment from 2019 (68%).
“This year has been challenging and unpredictable for the world, but our report shows that small business owners have not let the challenges of today impact their positive perception about our economic outlook,” Doug Sprecher, director of sales strategy at First Citizens Bank, said. “The small business community shoulders a significant amount of responsibility and has continued to showcase its resiliency year after year. Our goal is to leverage this data to better equip business owners with the insights and counsel needed to plan for and achieve greater business performance in 2021 and beyond.”
Small business owners are less confident in the conditions for the next 12 months. Of those surveyed, 57% reported being confident or very confident in the United States’ near-term economic conditions. This is a significant decline from 2019, when 66% of respondents felt confident about the immediate economic outlook.
Businesses with a history of fewer than 10 years (77%), those with more than 51 employees (86%) and business owners between 18 to 34 years old (89%) are most confident in their ability to grow. This year, small business owners in California showed the steepest decline in near-term economic confidence, with 49% (a 24% decrease from 2019) stating they were very or somewhat confident. Conversely, the outlook of their counterparts in Wisconsin (64%) and South Carolina (65%) remained relatively flat in year-over-year response to near-term economic conditions.
Even with a decline in confidence over the next 12 months, the survey found the entrepreneurial spirit of small business owners indicates continued resiliency. Although 67% said their business has been negatively impacted by COVID-19 and 79% feel personally responsible for the financial stability of their employees, small business owners reported having more confidence in their ability to grow their business in 2021 (69%) than they do in the overall economic outlook for the U.S. (57%). Of those planning to grow and expand their business in the next six to 12 months, 44% indicated they will do so by hiring more employees and 26% planned investments in technology.
Additional Findings
The First Citizens Bank Small Business Forecast is conducted annually in California, Wisconsin, Florida, South Carolina and North Carolina to assess the motivations, sentiments and success of U.S. small business owners.
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