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Business Confidence on the Rise Amid Greater Spending and Hiring Plans
Published on Jan 24, 2011
Read 'Business Confidence on the Rise Amid Greater Spending and Hiring Plans' at 'Time to Start Up,' the small business blog by BizFilings.
Confidence among private businesses is improving drastically, according to a new report released Monday by the National Association for Business Economics.
Thirty-eight percent of surveyed companies declared having larger or expanding workforces - up from only 13 percent a year ago. Meanwhile, the NABE Net Rising Index, which measures the rate at which business confidence is improving, grew to reach 35 points, marking the highest rate since the figure was introduced in 1998.
Spending among businesses is also improving. According to the report, 38 percent of respondents declared they are increasing their budgets, and 62 percent claimed to have heightened planned expenditures.
"The number of firms expressing positive hiring plans is at a level not seen in over a decade - a sign of improving labor market dynamics," said economist Shawn DuBravac of the Consumer Electronics Association. "Supporting these hiring plans, industry demand continues to move higher, and profit margins are expanding."
While the survey focused primarily on business as a whole, the implications for small businesses and entrepreneurs forming a corporation are immense. As companies improve their spending and hiring trends, small businesses will likely begin spending to stay in pace, and the lack of spending throughout the private sector has been one of the chief obstacles to recovery.
The Federal Reserve reported last year that, as of September, private businesses were sitting on $1.9 trillion, equating to 7.4 percent of all business assets - the highest rate in more than 50 years.