NEW YORK — Although small business owners are upbeat about the economy's prospects, they aren't as optimistic about their own revenue.
That's the finding of a survey of 1,000 owners conducted during June and July by the U.S. Chamber of Commerce and MetLife. An index of small business sentiment compiled from the survey rose to 69.7 from 68.7 in a survey taken during the second quarter.
The survey results were released Thursday, the same day the Commerce Department reported that the economy grew at an annual rate of 4.2 percent during the second quarter. The survey was completed July 27, hours after the government issued its initial 4.1 percent estimate of economic growth. While most of the participants were likely questioned before that news, owners have been increasingly upbeat based on how their companies and other businesses have fared.
Despite that optimism, the number of owners expecting their revenue to rise in the next year was down from the second quarter. Fifty-six percent expect their companies to bring in more revenue, down from 62 percent in the previous survey. Even the most optimistic owners in the latest survey, those with 20 to 99 employees, had lowered expectations; 64 percent forecast higher revenue, down 9 percentage points.
With a more pessimistic revenue outlook, owners also had reduced hiring plans. A quarter of the owners said they expect to expand their payrolls in the year ahead, down from one in three in the second quarter.
A drop in home sales may help account for owners' tempered revenue expectations. Sales of existing homes fell in July for the fourth straight month, according to the National Association of Realtors. The real estate market affects many small businesses, including general contractors and furniture retailers.
But there was a good economic sign for small businesses last week — consumer optimism about the economy keeps rising. The business research group The Conference Board said its consumer confidence index reached an 18-year high of 133.4 last month. Small businesses including retailers, restaurants and service providers like landscapers rely on consumers for much of their revenue.