Our February 2020 Wall Street Journal/Vistage CEO confidence survey found small business leaders feeling optimistic about the future of the economy. In fact, all components of the Small Business CEO Confidence Index improved, reaching 105.7 in February, up from the October 2019 low of 89.9, an 18% gain.

Let’s break down the questions CEOs were surveyed on, as well as their responses so we can show you what this gain really means.

Survey Questions & Responses

Here are the questions that small business CEOs were asked for this survey, followed by their responses. This poll surveyed 668 CEOs and features thirteen questions.

Compared with a year ago, have overall economic conditions in the United States improved, remained about the same, or worsened?

Of the CEOs surveyed, 253 (38%) responded that economic conditions had improved, 333 (50%) said they remained about the same, 76 (11%) said that they had worsened, and 6 (1%) said they didn’t know or had no opinion.

During the next 12 months, do you expect the overall economic conditions in the U.S. will be better, about the same, or worse than now?

178 (27%) of the CEOs surveyed said they believed economic conditions would be better, 333 (50%) said they would be about the same, 142 (21%) said they would be worse, and 15 (2%) said they didn’t know or had no opinion.

Do you anticipate that your company’s sales revenues will increase, remain about the same, or decrease during the next 12 months?

Of the small business CEOs surveyed, 508 (76%) said they anticipated that their sales revenue would increase, 119 (18%) said it would remain about the same, 34 (5%) said it would decrease, and 7 (1%) said they didn’t know or had no opinion.

Do you expect your company’s profitability to improve, remain about the same, or worsen during the next 12 months?

Of the CEOs surveyed, 427 (64%) said they expected profitability to improve, 172 (26%) said they expected it to remain about the same, 63 (9%) said they expect it to worsen, and 6 (1%) said they didn’t know or had no opinion.

Do you expect your firm’s total number of employees will increase, remain about the same, or decrease during the next 12 months?

Of the small business CEOs surveyed, 420 (63%) said they anticipated that their total number of employees would increase, 217 (32%) said it would remain about the same, 28 (4%) said it would decrease, and 3 (0%) said they didn’t know or had no opinion.

Are your firm’s total fixed investment expenditures likely to increase, remain about the same, or decrease during the next 12 months?

292 (44%) of the CEOs surveyed said their total fixed investment expenditures would increase, 312 (47%) said it would remain about the same, 56 (8%) said it would decrease, and 8 (1%) said they didn’t know or had no opinion.

Looking back over the last 12 months, what types of positions have you been hiring for in your company? (Select all that apply)

This question is a little different. 340 (51%) of CEOs surveyed said that they hired front line employees, 388 (58%) said they hired skilled employees, 156 (23%) hired front line managers, 269 (40%) hired functional leaders (sales, marketing, IT, etc.), 119 (6%) hired executive leadership, and 26 (4%) hired other (employees who did not fit these categories).

Did you consider changing the way your company is organized – from an S Corp. to a C Corp., or the reverse – in response to changes in the tax law?

This is the first of two “yes or no” questions. Only 98 (15%) of CEOs responded “yes” when asked if they considered this change, while 567 (85%) said “no.”

Have changes in the U.S. immigration policy impacted your business?

This is the first question to directly address the U.S.’s political climate in regards to business. Of the small business owners surveyed, 84 (13%) responded “yes,” saying that immigration policy had impacted their business, while 581 (87%) said “no,” signalling that it hadn’t.

Which external factors are currently the biggest challenge or risk to your business?

The responses to this question include a wide variety of challenges/risks. Since there are almost too many factors to list, we’ve presented the challenges and risks in bullet format:

• Regulation changes - 228 (34%)
• Access to capital - 161 (24%)
• Political climate - 232 (35%)
• Tax policies - 136 (20%)
• Tariffs/Trade agreements - 193 (29%)
• Job market’s impact on hiring & retention - 449 (67%)
• Immigration policy - 61 (9%)
• Pace of economic growth - 230 (34%)
• Cost of goods - 195 (29%)
• Consumer spending - 133 (20%)
• Other (does not fit any previous categories) - 83 (12%)

How are tariffs impacting your business?

Of the 668 CEOs surveyed, only 23 (3%) said tariffs were positively affecting their business, 423 (63%) said they had no impact on their business, and 220 (33%) responded that tariffs were negatively affecting their business.

Has the Trump administration changed prospects for your business?

Of the small business CEOs surveyed, 326 (49%) responded that the Trump administration has improved prospects for their firm, 127 (19%) said that it has worsened prospects, and 208 (31%) said it has had no impact on prospects for their firm.

During your company’s last fiscal year, what was its total employment?

Lastly, this survey took total employment figures of each CEO surveyed into account. Here are the results:

• 1-9 employees - 53 (8%)
• 10-19 employees - 138 (21%)
• 20-49 employees - 240 (36%)
• 50-99 employees - 147 (22%)
• 100-499 employees - 83 (12%)
• 500-999 employees - 5 (1%)
• 1000-4999 employees - 2 (0%)

Final Thoughts

Clearly, this survey takes a detailed look at how multiple factors shape a small business CEO’s views and confidence in the economy. From broad economic conditions to employment to political factors, this survey provides an in-depth perspective of how small business owners view the economic landscape.

The WSJ/Vistage Small Business CEO Survey is a monthly survey measuring the sentiment of U.S. small business CEOs and owners about the economy. You can download the full report for more insights here.