Sacramento Business Review released data from its Small Business Confidence Index, which polled over 3,000 local business owners and found that 95 percent employers had more faith in the Sacramento regional economy in mid-December, up from the 87 percent in June.
Sacramento businesses are more confident in prospects for future revenue and their ability to hire new employees in the first six months of 2017 than they were mid-2016, the report found. California State University, Sacramento’ School of Business conducted the review.
Kevin Terry, CEO of Sacramento-based Axis LED Lighting said the incoming administration’s promise to trim taxes and decrease regulation is boosting entrepreneurship and giving small businesses more confidence to invest in capital improvements.
“With a new administration, we’re all hopeful as business owners that things will lighten up and make it easier to conduct business than to monitor every little aspect,” Terry said. “But at the same time, we have new concerns: A lot of our goods are imported in, so we’ll definitely be looking at the potential tariffs and what that will mean for our company.”
As proof, the LED manufacturer says his sales have increased as other businesses are more willing to invest in their businesses.
“Businesses are looking to invest internally to see that bottom line look better,” Terry said. “More people are willing to make that initial higher cost to see that return than before.”
The National Federation of Independent Business and Wells Fargo’s Quarterly Survey of Small Businesses national polls also found small business owners are more optimistic than they have been since the 1980’s. Both reports credited the optimism to President-elect Donald Trump’s victory, and expectations of policy reform, including tax cuts and the dismantling of the Affordable Care Act. Each report surveyed around 600 businesses from across the country.
The Sacramento Metropolitan Chamber of Commerce found similar preliminary results in an optimism survey sent to the chamber’s member businesses Tuesday. Fifty-five percent of businesses that have responded so far are optimistic about future federal business policies, but nearly 60 percent are pessimistic about California state policies.
Chamber President and CEO Peter Tateishi said that although the federal administration’s plans are important, state and local government’s actions are going to have a much bigger effect on business’ bottom lines.
“The state can be more challenging to work with and doesn’t always invite the business to the table,” Tateishi said. “But at the county and city level in this region, we have governments saying small business is a priority, which is bringing people here.”
Outside of federal and state concerns, businesses in the Sacramento area have seen increased activity because of new facilities including the Golden 1 Center and the railyards project in the city. Tateishi said that lower costs compared to the Bay Area, cooperation between businesses and the city and investments from larger companies are encouraging small businesses to invest in the Sacramento area.
“The fact that there’s a lot of energy and innovation in our region is helping our businesses feeling growth and experience growth, and is bringing people here specifically,” Tateishi said. “Businesses are seeing they are becoming priorities in their local governments, and the cities see positive impacts.”