Small business owners in South Carolina are feeling optimistic about the economy, according to a recent survey conducted by North Carolina-based First Citizens Bank.
In its annual Small Business Forecast, South Carolina small business optimism jumped 18% from the previous year – the biggest jump of any of the states surveyed.
“What it tells me is that there is a very good vibe out there,” said Jimmy Gulledge, First Citizens Bank Upstate area executive. “It tells us there is a strong amount of optimism and entrepreneurial spirit with the folks that responded.”
The survey was conducted among 250 small businesses in North Carolina, South Carolina, Florida and California. Businesses could have no more than 500 employees to take part in the survey and 82% of those surveyed reported less than $1 million in annual revenue.
Overall, small business confidence was up as 71% of respondents said they were optimistic about their economic future over the next three years. That was a 7% increase from 2015, despite being in an election year when uncertainty is usually at its highest. In the survey, 36% of baby boomer small business owners indicated the presidential race was one of the top three factors affecting potential growth over the next two years.
“I think the information we discovered is that despite the interesting political climate we have and the global events going on, our folks are still optimistic,” Gulledge said. “From what I can tell from being in the marketplace, obviously everyone is interested in how it will impact them from tax and insurance perspective, but they still feel good about where their business is headed.”
The survey also showed that 77% of South Carolina respondents said the location of their business “is a great place to start a small business.” South Carolina was only behind Florida in the percentage of small business owners who feel confident about economic growth over the next three years.
“I think South Carolina is a great state, especially in the Upstate where the economy is pretty diverse,” Gulledge said. “If you look at all the capital investment made in the state with automotive in the Upstate and Boeing in the Lowcountry, there has been a ripple effect and it is reflective in the employment numbers.”
He added that what he hears most from small business owners in the region is that 2016 is either one of, or the best year those business owners have had. He said having diversified larger businesses like BMW, Boeing and others grow creates a ripple effect for small businesses to thrive. He said another reason for an increase in capital investment made across South Carolina is low interest rates.
However, the conventional wisdom is that the Federal Reserve is expected to tick rates up sometime before the end of the year. A recent report by the Wall Street Journal suggested traders are confident the rate hike will occur before the new year. Despite that, Gulledge said the implications of a potential rate hike are low.
“In the short term I don’t think there will be a big negative impact, especially for small businesses,” Gulledge said. “It may be for bigger businesses, but I think that will be low.”
But, he said there was reason to be cautious moving forward.
“I always think there is reason to be cautious,” Gulledge said. “While folks are looking to grow, you have to remember that 2008 and 2009 wasn’t that long ago.
“People are proceeding, but they are proceeding with caution. They are trying to be wise with the decisions they are making.”
Another statistic from the survey was that 60% of small business owners believe social media is on the same level as word of mouth in terms of learning about small business trends. The survey said the percentage of owners who use social media to discover business trends “increased significantly from 2015, not only in general, but also across all demographic segments.”
“Everything that we are all doing has such a technology emphasis and that came across loud and clear,” Gulledge said.