Feeling more optimistic about economic growth in 2012, small-business owners are planning to hire more employees this year to match expected revenue and profit gains, according to a new survey. Data from firm Vistage International shows 55% of small-business executives anticipate adding to their staffs in 2012, a 9% increase compared to polling done in the fall. The latest results closely follow positive news about the U.S. labor market and steadied consumer spending. "The very fact that things didn't get worse is for some people a cause for optimism," said Rafael Pastor, CEO of Vistage.
About 41% of survey respondents said they thought the economy improved in 2011, more than double the response in the third quarter of last year. Meanwhile, only 12% of the 1,600 CEOs surveyed said the economy had gotten worse. The boost in optimism lifted Vistage's confidence index to 98.8 in the fourth quarter of 2011, a significant jump from the 83.5 and 92.9 readings posted earlier last year. While small-business confidence is up, data shows CEOs still have several concerns heading into 2012, including the effects of Europe's financial crisis (cited by 43% of respondents) and the perceived failures of Congress to address U.S. debt and deficit increases (69%).
Coinciding with the mostly positive data from Vistage's survey, a separate report released by Intuit this week showed U.S. small businesses created 55,000 jobs in December and also increased working hours for employees. For 2011 overall, Intuit said worker compensation was up by 3.4%, offsetting the 3.3% rise in inflation. "All of the figures we track show a stronger small-business environment in December," said Susan Woodward, an economist who helped prepare the report.