Sacramento-area employers are more confident about their businesses’ future after the 2016 elections than they were before, two new reports found.
The Sacramento Business Review released data from its Small Business Confidence Index, which polled more than 3,000 local business owners and found that 95 percent had more faith in the Sacramento regional economy in mid-December, up from the 87 percent in June.
Sacramento businesses are more confident in prospects for revenue and their ability to hire new employees in the first six months of 2017 than they were in mid-2016, the report found. Sacramento State’s school of business conducted the review.
With a new administration, we’re all hopeful as business owners that things will lighten up and make it easier to conduct business than to monitor every little aspect.
Kevin Terry, CEO of Sacramento-based Axis LED Lighting
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Kevin Terry, CEO of Sacramento-based Axis LED Lighting, said the incoming administration’s promise to trim taxes and decrease regulation is boosting entrepreneurship and giving small businesses more confidence to invest in capital improvements.
“With a new administration, we’re all hopeful as business owners that things will lighten up and make it easier to conduct business than to monitor every little aspect,” Terry said.
As proof, the LED manufacturer says his sales have increased as other businesses are more willing to invest in their businesses.
“Businesses are looking to invest internally to see that bottom line look better,” Terry said. “More people are willing to make that initial higher cost to see that return than before.”
The National Federation of Independent Business and Wells Fargo’s Quarterly Survey of Small Businesses national polls also found small-business owners are more optimistic than they have been since the 1980s. Both reports credited the optimism to President-elect Donald Trump’s victory and expectations of policy reform, including tax cuts and the dismantling of the Affordable Care Act. Each report surveyed around 600 businesses across the country.
The Sacramento Metropolitan Chamber of Commerce found similar results in an optimism survey sent to the chamber’s member businesses Tuesday. Fifty-five percent of businesses that have responded so far are optimistic about future federal business policies, but nearly 60 percent are pessimistic about California state policies.
Chamber President and CEO Peter Tateishi said that although the federal administration’s plans are important, state and local government’s actions are going to have a much bigger effect on businesses’ bottom lines.
“The state can be more challenging to work with and doesn’t always invite businesses to the table,” Tateishi said. “But at the county and city level in this region, we have governments saying small business is a priority, which is bringing people here.”
Outside of federal and state concerns, businesses in the Sacramento area have seen increased activity because of new facilities including the Golden 1 Center and the railyard project in the city. Tateishi said lower costs compared with the Bay Area, cooperation between businesses and the city, and investments from larger companies are encouraging small businesses to invest in the Sacramento area.
“The fact that there’s a lot of energy and innovation in our region is helping our businesses feeling growth and experience growth, and is bringing people here specifically,” Tateishi said. “Businesses are seeing they are becoming priorities in their local governments, and the cities see positive impacts.”