The change is largely due to a decline in economic outlook and expectations (both national and local), but small business owners report their fundamental business operations remain strong:
  • More than half of small business owners (56%) expect increased revenue in 2019, down only slightly from last quarter (60%).
  • More than one in four small business owners (27%) plan to increase investment over the next year, almost unchanged from Q4 (29%).
  • A similar number of small businesses report plans to increase staff over the next year (29%), compared to last quarter (30%).
This quarter, the MetLife & U.S. Chamber of Commerce Small Business Index recorded the first significant drop since the survey began in 2017. Conducted in the midst of the longest federal government shutdown in history, the survey score dropped from 69.3 in Q4 of 2018 to 65.6 in Q1 2019.
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Q1 INDEX HIGHLIGHTS SMALL BUSINESS INDEX: IN HISTORICAL CONTEXT
Expectations for national economy decline. Optimism about the health of the U.S. economy declined this quarter. While a majority of small businesses (53%) report a belief that the national economy is in good health, this number dropped five percentage points from last quarter (58%). View of local economy dips, too. Small business owners’ views on their local economy are on par with the national economic outlook (53% rate it in good health). This reflects a slight downward shift from the Q4 2018 rating of 56%. Small businesses anticipate steady staff levels, investment. Twenty seven percent of business owners plan to increase investment over the next year, almost unchanged from Q4 (29%). Similarly, 29% report plans to increase staff, unchanged from last quarter (30%). Veteran, minority, Gen X, and Millennial-owned businesses look to hire. Plans to increase headcount over the next year are primarily driven by businesses with 20 or more employees (44%), veteran-owned businesses (44%), minority-owned businesses (42%), and Millennial or Gen X-owned businesses (39%). Views of national economy decline across most of country. Views on the national economy have consistently softened across the Northeast, Midwest, and West regions. Northeast most pessimistic on local economy. Businesses in the Northeast marked the biggest decline in optimism: just 38% say their local economy is in good health, down 10 percentage points from Q4 2018. Revenue expectations down slightly. Fewer small businesses expect revenue to increase (56%), compared to the end of 2018 (60%). Potential shutdown effect? The survey was conducted from Jan. 3-Jan. 31, mostly overlapping with the federal government shutdown from Dec. 22, 2018-Jan. 25, 2019. While it’s not clear if this affected small businesses’ views, a number of respondents mentioned the shutdown, without prompting.
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Small business expectations down, but fundamentals remain strong
OREGON UPDATE
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SMALL BUSINESS INDEX BY METLIFE & THE U.S. CHAMBER OF COMMERCE
The Chamber of Medford/Jackson County
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Phone: (541) 779-4847

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