Almost six years after the U.S. economy hit bottom in June 2009, almost two-thirds of U.S. small business owners are still working to recover from the Great Recession, according to a Bank of America survey.
The semiannual survey of 1,000 small-business owners found that 64 percent are still recovering, and only 21 percent say they have completely recovered from the downturn.
But small business owners are still confident about future growth: 63 percent think revenue will increase in the next 12 months, and 66 percent plan on growth over the next five years. Almost half (46 percent) plan to hire more employees in the next year (down from 52 percent a year ago). But 41 percent say they're struggling to find qualified job candidates. Of those business owners, 59 percent said applicants lack the skill sets they need, 45 percent said candidates want pay that's too high, 29 percent said would-be employees would rather work for a large or midsize company, and 26 percent say applicants want benefits the small business doesn't provide.
Instead, more and more owners are opting to train and develop current employees. Among small-business owners who plan to apply for a loan in 2015, 38 percent will use the money for employee training, while only 32 percent will use it to hire new staff. (Borrowing of all kinds by U.S. small businesses is up by 7 percent from a year ago, according to the Thomson Reuters/PayNet Small Business Lending Index.)
Optimistic though they are, small-business owners still see headwinds, according to the survey. The biggest is health care: 70 percent are concerned about health care costs. While 37 percent already offer health insurance as an employee benefit and 23 percent said government-mandated health care would have a positive impact, 39 percent said a health care mandate would have the biggest negative impact of any government action on their business.
Other major regulatory concerns include the possibility of mandated sick leave (29 percent) and an increased minimum wage (26 percent). But owners believe the biggest positive government impact would come from expanded tax breaks for automatically enrolling employees in retirement savings accounts (36 percent) and incentives to keep jobs in the U.S. (31 percent).
The study also spot-checked small-business owners in nine U.S. cities. Owners in Los Angeles (28 percent) and Miami (25 percent) were most likely to say their business has completely recovered, with those in New York (19 percent) and Boston (18 percent) least likely. For local economic improvement, the most optimistic owners were in Los Angeles (61 percent), Dallas (59 percent), Miami (59 percent) and San Francisco (61 percent). And when it came to hiring plans, owners in Dallas (57 percent) and Miami (53 percent) were most likely to hire in the next year, compared with New York (44 percent) and San Francisco (40 percent).