A survey conducted by the Federal Reserve found that 78% of small businesses in the U.S. expect revenue growth in 2019. This is higher than 57% in 2018 and indicates a positive economic outlook for small firms. Despite this, only 44% expect to make additional hiring. This is lower compared to 48% in 2018.
About 196,000 jobs were added in March 2019 with the unemployment rate hitting 3.8%.
According to Federal Reserve officials, small businesses are probably finding it hard to find qualified workers in the tighter labor market and some may have turned to contract employees. Another reason for less hiring is the higher input costs faced by small businesses. In 2018, the higher costs of doing business were passed on to consumers in the form of higher prices by small business.
The study also found changes in where small businesses get their funding. The percentage of companies that turned to online lenders increased from 24% in 2017 to 32% in 2018. According to former Small Business Administration administrator Karen Mills, fintech companies are starting to play a bigger role in small business lending and this will benefit small businesses.