Small Business Owner Optimism Holds Steady

May 17, 2007; 06:10 AM
Small business owner optimism rose to levels near last year's record highs in the latest Wells Fargo/Gallup Small Business Index. The Index registered at 113 for Q2 2007, nearly matching the high-score of 114 in Q4 2006. The Index tracks six key measures for both current and future expectations: financial situation, cash flow, revenues, capital allocation, job hiring and credit availability. For the past three quarters, all six measures have remained consistently strong, demonstrating an optimistic outlook. In fact, 95 percent of respondents report feeling successful as a small business owner.

"Small business optimism increased in the second quarter to levels not significantly different from December 2006's all-time high of 114," said Dr. Scott Anderson, Wells Fargo senior economist. "Despite fears that higher gasoline prices would weaken small business demand, steady job and income growth have helped sustain robust revenues and cash flows for small businesses. These survey results are consistent with our forecasts of a moderate rebound in economic activity in the second quarter of 2007."

The Q2 2007 results show more respondents "extremely satisfied or very satisfied" as small business owners compared to Q1 2007 (60 percent versus 50 percent, respectively). Additionally, 83 percent of small business owners said they would do it all over again if given the opportunity, up five points from 78 percent in Q1 2007.

About the Small Business Index

Since Q3 2003, the quarterly Wells Fargo/Gallup Small Business Index has surveyed small business owners on their perceptions of current conditions and future expectations relating to financial situation, revenues, cash flow, capital spending, number of jobs and credit availability. Results are based on telephone interviews with approximately 600 small business owners nationwide conducted April 10, 2007 through April 17, 2007. The margin of sampling error is + 4 percentage points.

About Wells Fargo

Wells Fargo & Company is a diversified financial services company with $486 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 6,000 stores and the internet (wellsfargo.com) across North America and internationally. Wells Fargo Bank, N.A. is the only bank in the U.S., and one of only two banks worldwide, to have the highest credit rating from both Moody's Investors Service, "Aaa," and Standard & Poor's Ratings Services, "AAA."

Providing financial products and services to more than one-and-a-half million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is America's #1 small business lender in total dollar volume according to the most recent CRA data (2005).

About the Gallup Organization

For more than 60 years, the Gallup Organization 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.