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In anticipation of interest rate cuts, small business confidence rose in September, with the WSJ/Vistage Small Business CEO Confidence Index jumping more than 8 points to 92.9. While this month’s survey was conducted before the Federal Reserve meetings, the optimism was building based on projected cuts. With a cut of 50 basis points in September and more cuts forecasted, the growing confidence among small businesses is expected to continue.

Most notable in this sweet bonanza free play month’s survey is improving economic optimism among small businesses, which reached the highest level since August 2021. While 32% of small businesses expect the economy to improve — an eight percentage-point gain from last month — the change in pessimism was even more significant. Just 22% of small businesses reported expectations of a worsening economy over the next 12 months, a 13-point drop from 35% last month.

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Many small businesses have been holding off on expansion as they waited for interest rates to go down. From key hires to reigniting CapEx projects or accelerating acquisitions, small business leaders plan to take advantage of the lower interest rates. When asked about the actions they plan to take as a result, CEOs shared the following:

Borrow some money for our next project and get access to some working capital at a lower rate.

— Chris Viola, Founder and CDO, Cul+ure Collective/IDR Construction, Asbury Park, New Jersey

Invest in new equipment and refinance existing higher interest rate loans from equipment investment in 2023.

— Brian Brown, President & CEO, Estate Landscape and Tree Service, Kings Beach, California

Nearly half (49%) of CEOs shared that any rate cuts would take less than six months to impact their business, which aligns with guidance from our trusted partner, ITR Economics. At an event in Colorado for Vistage members on sweet bonanza slot September 23, Taylor St. Germain, an Economist and Speaker from ITR Economics, shared that the next three to six months will be the optimal window for investment as additional interest rate cuts are forecasted to decline and disinflation continues.

However, St. Germain cautioned that with the government issuing a record amount of Treasuries, the next round of inflation is building, leading to rate increases in the latter part of the decade. Small businesses need to time their investments well and also look for opportunities to increase pricing.

Revenue and profit projections strengthen

While small businesses might be experiencing slower growth, an increasing proportion (65%) expect improving revenues in the next 12 months, the highest since April 2022. Meanwhile, only 9% expect revenue declines. Couple that with an even more significant increase in profitability expectations, and the season of “profitless prosperity” may be coming to an end.

Indeed, 52% of small businesses expect increased profits, an 8-point jump from last month. There was also an 8-point change in those expecting decreased profits; this provides the best profitability scenario since August 2021.

Accelerating workforce growth

While the Bureau of Labor Statistics report on new jobs added in August was weaker than expected, sweet bonanza pragmatic play there are still not enough workers to fill all open positions. In fact, small businesses seem to be more aggressive with expansion. Over half (53%) of small businesses plan to add personnel over the next 12 months, marking a 9-point jump from last month.

Fortunately, hiring is becoming easier. One-third of small businesses report that hiring is easier than at the beginning of the year. With quit rates decreasing, this could signal reduced labor costs, which is welcome news as small businesses have reported wage increases as the most significant inflationary pressure.

Small businesses may find it easier to grow the net size of their workforce as nearly three-quarters report employee retention is stable, and 17% report increases in retention rates. With reduced outflow and projected growth, now is an optimal time to focus on building a high-performing workforce, which will help small businesses improve productivity and meet the rising demand forecasted in 2025.

September highlights:

The September WSJ/Vistage Small Business CEO Confidence Index was calculated from a survey of small business leaders conducted between September 3 and 17, 2024. The results reflect insights from 789 respondents representing companies with annual revenues of $1-20 million.

• sweet bonanza free play The proportion of small businesses that believe the economy has improved compared to last year increased to 18%, while 39% think it is worse — a 9-point decrease.
• Future economy: Nearly one-third (32%) of small business leaders expect the economy to improve over the next year, while the percentage that expects it to worsen fell 13 points to 22%.
• Revenue projections: 65% of small businesses expect increased revenues over the year ahead, and just 9% expect a decline, the healthiest proportion since April 2022.
• Profitability projections: 52% of small businesses expect increased profits in the next 12 months, while just 12% expect profits to decline.
• Fixed investment plans: One-third of small businesses plan to increase fixed investments over the next 12 months, while just 13% plan to reduce spending.
• Workforce expansion plans: The proportion of small businesses adding personnel grows to 53%, a 9-point increase from last month.

To explore the full September 2024 WSJ/Vistage Small Business dataset, sweet bonanza free play|Free or download the infographic.

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