American business owners are optimistic about the health of their businesses but lack confidence in the economy, according to new research.
Principal Financial Group Inc. published this finding in its inaugural release of the “Principal Financial Well Being Index: Business Owners.” Surveying 604 American business owners of small- to medium-sized businesses with 10 to 500 workers, the report is part of a series on the financial well-being of Americans released quarterly by the Principal Financial Group. The survey is conducted online by Harris Interactive.
Almost half of those surveyed (47 percent) say their business financials improved compared to a year ago and 58 percent believe their financials will improve in the next 12 months. However, 46 percent are cautious about the economic outlook for 2013. And two-thirds are holding off on making long-term financial commitments because of the current state of the economy.
“While owners of small- to medium-sized businesses report growing confidence in what they can control – their own companies – they do so with a healthy dose of caution in the context of the overall economy,” says Amy Friedrich, vice president of the Principal Financial Group. “As these owners prepare for Election Day, the economy will not only influence their vote, but also their long-term plans for spending.”
Business owners are also reluctant to spend cash. According to the report, 63 percent say they have surplus capital, but 73 percent of those who have surplus capital are not spending any of it.