Small business optimism

A new Administaff survey shows that 52% of small business owners expect an economic turnaround in 2010, with 21% saying a turnaround won’t happen until 2011.

Also, 13% say a turnaround is happening now, but a growing percentage of small business owners are concerned about federal government expansion.

The economy was listed by 76% of business owners as one of their biggest short-term concerns, down from 83% in July, followed by 50% citing government health care reform, 41% listing controlling operating costs and 39% specifying rising health care costs.

“Small and medium-sized businesses are signaling that they are cautiously optimistic about an economic rebound in 2010,” Paul Sarvadi, Administaff’s chairman and CEO, said in a statement. “However, current political uncertainty appears to be a significant factor slowing the pace of recovery.”

OTHER SURVEY FINDINGS
• For the longer-term, those who said they were “very concerned” once again listed the economy in fourth place at 41%, whereas 47% named government expansion and the effect on business as the leading issue, 45% cited potential tax increases as second and nearly 42% designated the federal deficit and the total national debt as third.

• When respondents were asked about their pipeline for new business for the balance of 2009 and early 2010, 48% responded that they expect a sales increase, up from 41% last quarter; 33% predict it will stay the same, while only 11% anticipate decreasing sales.

• In addition, 58% of owners and managers of small and medium-sized businesses said that they are either meeting or exceeding their 2009 performance plans, with the remaining 42% reporting that they are doing worse than expected.

• Compared to the 2008 third quarter, average compensation is up 0.9%; bonuses are down 0.9%, and commissions were up 4.1% in 2009, their first positive move in a year.

• Also, 61% of participants said they are maintaining current staffing levels, while 28% are adding new positions, up from 23% three months ago and 18% six months ago.

• The survey also said that 54% of participants expect to maintain employee compensation at current levels into 2010, 23% plan increases, 4% expect decreases, and 18% were unsure.