Entrepreneurs Increasingly Confident About U.S. Economy
While members of Congress will be listening this week to Fed Chair Janet Yellen testify about the national economic outlook, they received an early glimpse last week with news that U.S. entrepreneurs' confidence continues to rise. The latest Kaufman/LegalZoom Startup Confidence Index showed that 91 percent of the nation's newest business owners were confident or very confident that their companies' profitability would increase in the next 12 months.
Startup owners showed increased confidence in the U.S. economy and a larger percentage said they planned to hire in the next 12 months.
Eighty-two percent are confident the economy will improve or stay the same in the next 12 months, an increase of 3 percentage points over the fourth-quarter survey.
"While entrepreneurs in general are considered optimistic by nature, it's encouraging to see founders of new startups have this level of high confidence for twelve months straight," said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation. "Perspective is everything. We need new firm creation to grow our economy, but people aren't going to start companies if they don't feel good about their business prospects."
Leading the way were the youngest entrepreneurs. Eighteen- to 30-year-olds and 31- to 40-year-olds expressed 97 percent and 95 percent confidence levels, respectively.
Anticipation of growing consumer demand remained constant, with 55 percent of entrepreneurs saying they believe consumer demand will increase moderately or significantly in the next 12 months, which matches the highest number in any of the 2013 surveys.
Plans to hire additional employees also rose, from 43 percent in the fourth quarter to 45 percent in the first-quarter 2014 survey.
"Since we began our survey, we've seen a fair amount of volatility quarter to quarter," said John Suh, CEO of LegalZoom. "Over the last twelve months, confidence has stabilized at historic highs around anticipation of increased consumer demand and intent to hire."