Union Bank® Small Business Economic Survey: Pacific Northwest small Businesses optimistic about direction of the national and local economies

To hear our Feb. 15 interview with Nicole Lapin, click on the grey podcast button at the bottom of the page.
Los Angeles, CA – Small business owners across the Pacific Northwest are more confident about the national and local economies this year, according to results from the 18th annual Small Business Economic Survey released today by Union Bank.
The survey found that more than half of small business owners in Oregon and Washington State said the national and local economies are headed in the right direction, up 14 points and 17 points respectively from January 2016. This raised level of confidence extends to their own businesses, with nearly 96 percent of respondents expressing confidence in their company, an increase of 17 points from January 2016.
“It is very encouraging to see more business owners holding a positive view of U.S. economy
compared to last January,” said Union Bank Managing Director Todd Hollander, Head of
Business Banking. “This confidence is essential if further job growth and expansion is to occur.”
However, small business owners in the Pacific Northwest region are significantly less optimistic
about the direction of the U.S. than their West Coast peers. One-quarter of small business owners
in the Pacific Northwest believe the U.S., as an entity, is headed in the right direction compared
to 38 percent of West Coast businesses.
Small business owners in the Pacific Northwest are also more pessimistic about the future
business climate than their counterparts in California. Nearly half (47 percent) of Pacific
Northwest respondents believe the business climate will worsen over the next two years. This
compares to 32 percent of all California survey participants.
Staffing, Sales and Capital Expenditures
One-quarter of small business owners in the Pacific Northwest hired new employees in 2016, on
par with results across the West Coast (28 percent). However, the vast majority (90 percent) said
they will keep personnel levels in line with last year.
Slightly more than half (55 percent) of Pacific Northwest small business owners reported stable
sales for 2016, similar to the West Coast average of 49 percent. Generally, small business owners
plan to keep costs and prices consistent this year, which follows trends across the West Coast.
Still, one in four plan to increase prices.
Referrals from existing clients remain the most common means of generating new business,
followed by networking and additional spending on marketing and advertising. Two-thirds of
small business owners expect to keep capital expenditures the same in 2017.
Impacts of Jobs Act, Affordable Care Act, Minimum Wage
Pacific Northwest small business owners are significantly more likely than the West Coast
average to say they have felt no impact from the Small Business Jobs Act (80 percent versus 70
percent).
Small business owners in the Pacific Northwest are divided on the issue of health care costs. Half
of small business owners reported no change to health care costs as a result of the health care
changes, though 42 percent said their health care costs have “somewhat or greatly” risen.
However, 8 in 10 respondents said the Affordable Care Act has not impacted employment.
The Pacific Northwest’s small business owners are less worried about proposed changes to the
minimum wage than other West Coast businesses. Just 16 percent noted they were either
“extremely concerned” or “very concerned” about the proposed changes, compared to 23 percent
of all survey participants.
Federal Support for Small Businesses
Although small business owners in the Pacific Northwest do not favorably rate the federal
government’s efforts to stimulate small business growth, they agree with other West Coast
business owners that more government programs are a top way to grow small business. This is
followed by lower interest rates (30 percent) and greater access to capital and credit (24 percent).
In response to questions about equal pay, 60 percent of Pacific Northwest small business owners
said these policies remain a low priority and they have not made any conscious efforts to address
the issue.
Access to Credit, Spending
Nearly three-quarters of small business owners in the Pacific Northwest said that access to credit
has remained the same for the past two years. Only 13 percent applied for credit in 2016 and just
half of that (6 percent) plan to apply for credit this year.
Pacific Northwest small business owners are split when asked if they are prepared for changing
interest rates. A majority (56 percent) said they are prepared, while 44 percent said they are
either unsure or admit to being unprepared. This is similar to the West Coast average.
Over half (56 percent) of small business owners said they are working the same number of hours
in early 2017 as they did during the same time last year; 28 percent said they are working more;
and 16 percent said they are working “somewhat or a lot less.”
Planning the Future: Ownership Structure
The proportion of small business owners planning changes to ownership structure remains
constant, with 88 percent reporting that their business will continue to operate in its current form. This is similar to the West Coast average of 82 percent.

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