Business Owners Expect Good Times to Go On

Signs are emerging of an economic slowdown, but don’t tell that to U.S. small-business owners. A clear majority expect the nation’s long economic expansion to continue over the next 12 months, while more than two-thirds project their sales and profits to increase as well.

Those are some of the findings of an annual survey to be released today by National Small Business United and Arthur Andersen that finds the mood of the nation’s small- and mid-size businesses to be decidedly upbeat.

Fully 61% of business owners surveyed expect the U.S. economy to keep on cranking. That’s nearly double the percentage who thought so last year. Most expect their own sales and profits to keep growing as well, while more than one-third of companies surveyed said they’d be hiring more employees in the coming year.

That’s where the expansion bandwagon is hitting some potholes. Business owners say finding and retaining qualified workers in a tight job market is far and away the biggest problem confronting their firms, with 61% of those surveyed citing it as a challenge to their growth and survival. (In comparison, government regulations were a distant runner-up, mentioned by just 35% of business owners surveyed.)

That’s leading to upward pressure on wages, feared by the likes of Alan Greenspan. More than 60% of entrepreneurs surveyed said they expect employee compensation to increase over the coming year.

That doesn’t appear to include health insurance, however. A bare majority of survey respondents-- 51%--said they offer medical coverage to their employees. That’s down markedly from 63% a year ago, thanks in part to the rising cost of coverage.

High employee costs lead many business owners to boost productivity through investment in technology, but business owners are concerned about those costs as well. Nearly 60% cited cost as the biggest difficulty they face in incorporating information technology in their firms.

Still, 85% of companies say they now use the Internet to conduct business, up from 65% in 1998.

The nationwide mail poll of 557 business owners was conducted from December 1999 through March 2000. For more survey results, check out the NSBU Web site at https://www.nsbu.org.