Economic Forecast: Small and Mid-Size Business Owners Optimistic About U.S. and Personal Growth in 2014
More Than Half of Small and Mid-Size Business Owners Plan to Give Employees a Raise and One-Third Plan to Hire According to Economic Forecast from Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet Credibility Corp.
LOS ANGELES, Calif. – In a survey of small and mid-sized business, the Pepperdine Private Capital Markets Project 2014 Economic Forecast shows that business owners are optimistic about growth opportunities, both nationally and personally, for the remainder of 2014. More than half of respondents (56 percent) are more confident about business growth prospects compared to a year ago. The 2014 Economic Forecast produced by Pepperdine University’s Graziadio School of Business and Management together with Dun & Bradstreet Credibility Corp. collected insights from over 3,600 small and mid-sized business owners and gauged their level of confidence for economic growth over the next year. The survey assessed business owners’ perspective about which government policies promote or hinder economic growth. The forecast reveals that 33 percent of respondents plan to hire one to two employees in the next six months, 58 percent of respondents plan to raise pay for employees in the next 12 months and 60 percent of owners expect to make more money next year. When asked about barriers to growth, government regulations (taxes and healthcare) topped the list in 2013 and 2014 as the most influential impediment to U.S. Gross Domestic Product (GDP) growth next year. “As business owners’ optimism improves, it will be critical to see whether their confidence translates into actual measures to grow their business,” said Dr. Craig Everett, director of the Pepperdine Private Capital Markets Project. “Hopefully, the plans of small business owners to hire additional employees and raise pay will materialize and we will begin to see more robust improvement in the economy.” Compared to 2013, business owners are more optimistic about an increase in GDP in 2014 and 2015, as well as growth in the S&P 500. They also think it is less likely that the U.S. will experience a recession this year and that the national unemployment rate will continue to decrease. “This survey marks a pronounced positive shift for small and medium sized businesses,” stated Jeff Stibel, Chairman and CEO of Dun & Bradstreet Credibility Corp. “For the first time, the smaller American businesses are growing, adding jobs, optimistic about the future. The economic recovery is now in full effect.” Other perspectives from business owners collected in the 2014 Economic Forecast include:
- GDP is projected to increase 0.6 percent in 2014 compared to 0.4 percent in 2013.
- The probability of U.S. recession in the next year is 29.2 percent in 2014 down from 36.2 percent in 2013.
- 58 percent of respondents support significant reform of the Affordable Care Act (ACA).
- 60 percent support comprehensive immigration reform with a path to citizenship.
- 78 percent support having a balanced U.S. budget.
- There was less focus on regulatory reform and tax incentives to spur job creation in 2014 than in 2013 with the focus shifting to reforming/repealing the ACA.
2014 Economic Forecast: Insights from Small and Mid-Sized Business Owners from Pepperdine University Graziadio School of Business and Management