NEW YORK (AP) — Small business owners got a shot of optimism at the start of 2013 after the country avoided the "fiscal cliff," according to a survey released Thursday.
The survey by Wells Fargo & Co. and Gallup showed that owners are still anxious about the economy and health care. But their deep worries about the future eased when Congress reached an agreement early this month on taxes and put off sharp budget cuts. Without that agreement, economists had warned that the country could go back into recession.
The Wells Fargo/Gallup Small Business Index rose 20 points to 9 points, compared to a reading of negative-11 points in the last survey, taken in mid-November. The index remains far below 114, the level it reached in December 2006, a year before the recession began. But it's also well above its low of negative-28 in the third quarter of 2010.
Wells and Gallup questioned 601 small business owners from Jan. 7-11. Eighty-one percent said they don't need to hire any more employees at this time. Seventy-four percent said they're worried about having the revenue to justify hiring. Nearly two-thirds said they're concerned about the economy, and 61 percent were worries about how much the health care law, which takes full effect in 2014, will cost them.
But the number of owners who expect their company's finances to be very or somewhat good over the next 12 months rose to 57 percent in early January from 50 percent in November. Forty-three percent expect their revenue to grow, up from 37 percent in the previous survey.
The November survey was conducted after President Barack Obama was re-elected and as it was unclear whether negotiations in Congress would prevent the country from going over the cliff.
Many business owners have said they were holding off on hiring and other decisions until they knew whether their taxes would increase. Congress approved an increase in taxes on individuals with incomes over $400,000 and households earning more than $450,000. Those increases affect small business owners who report their companies' income on personal 1040 forms.
The budget cuts are scheduled to be up for debate again during February. Congress faces a new deadline of March 1 for spending cuts to kick in automatically — unless a new agreement is reached.