Small business owners in Nevada are bullish on the economic prospects for the state and nation, and the election of Donald Trump as president has buoyed that outlook.
That’s part of the findings of a survey conducted by Nevada State Bank of more than 400 of the state’s small business decision-makers, including owners, operators and management executives representing businesses with annual sales ranging from $250,000 to $10 million.
The survey conducted by Las Vegas-based research firm Applied Analysis in December and January after the election revealed that 77 percent said the Nevada economy is headed in the right direction and 69 percent said the same for the U.S. economy. Only 62 percent a year ago said the Nevada economy was headed in the right direction and 40.5 percent felt the same of the U.S. economy, according to Terry Shirey, president and CEO of Nevada State Bank.
The survey piggybacks on the election of Trump with more than 61 percent saying his election has had a positive impact on their business.
“The conclusion one draws is the election did have a pretty good impact on sentiment,” Terry said.
It’s probably a combination of reasons from the gains in the stock market since the election of Trump and GOP promises to cut taxes and reduce regulations — positions many businesses believe create a better environment for economic growth, Shirey said.
Small business owners tend to vote Republican.
“I think in order to be sustained, we will have to see some real results and some of the election promises made — see them fulfilled,” Shirey said.
Confidence in the economy today, meanwhile, is evident in the survey.
More than 70 percent expect their business revenues to increase this year. Some 36 percent plan to add employees in the next 12 months, up from 27 percent last year, Shirey said.
“Clearly adding employees is a sign of growth that is expected and confidence in your business,” Shirey said. We found the survey to be very encouraging. It goes beyond the election. There are a lot of great things happening here in Nevada. There are strong metrics on the Strip with visitation and diversification of the economy. We replaced all the jobs lost in the recession.”
One of those who participated in the survey was David Pearce, owner and president of the Pin Center, a company with eight employees that manufacturers and sells lapel pins, custom coins, key chains, lanyards, medallions and city keys in 50 states and more than 20 countries. Its customers include cities, governments, trade associations, businesses, clubs and other organizations seeking to create or leverage their brand.
“I’m feeling pretty good about our business and general business conditions,” Pearce said. “The Great Recession was so deep, and the recovery has been so slow in terms of not high growth rates that there’s still a long runway left on the recovery, and we’re seeing that because we deal with all 50 states.”
“I still think there’s a lot of untapped growth out there,” Pearce said. “People are feeling confident about things with the new administration. A lot of business people are pretty positive and investing in their companies. If you’re investing in marketing, you have to be optimistic because you are investing in the future. We’re seeing a lot of that — people who are saying they don’t just want to keep their business going, they want to take a risk and grow it.”
Southern Nevada business owners were asked about a proposed pro football stadium near the Las Vegas Strip and the Las Vegas Convention Center expansion.
Stadium support was high, with more than 70 percent saying the proposed stadium for UNLV and possibly NFL games would have a positive impact on Southern Nevada. However, concerns were raised about the use of Clark County room tax dollars to help fund the stadium, with nearly 50 percent saying it is a poor use of funds, according to the survey.
While 66.7 percent said they didn’t believe the Las Vegas Convention Center project would directly impact their business, 75.1 percent said it would have a positive impact on the community. A majority said the project is a wise use of Clark County room tax dollars, according to the survey.
As in past years, the survey showed small business owners in Nevada continue to face challenges in recruiting quality employees. More than 70 percent of respondents said it is “somewhat” to “very” difficult to recruit candidates from within their market, up from 66.1 percent a year ago and 61.4 percent in the survey conducted two years ago.
When it comes to bank lending, the survey showed 60.8 percent of those who applied for financing in the past 12 months were fully approved. A year ago, 46.4 percent said they were fully approved.
That response seems to dispel the notion about small businesses being unable to get bank loans or lines of credit.
“Three to four years ago, we were hearing a lot more of that than we are today,” Shirey said. “I think it’s because businesses weren’t doing as well as they are today. Frankly, banks lend based on cash flow, and that was challenging coming out of the recession. Here in Nevada, we saw approval rates much lower.”
Some 29 percent of those surveyed said they expect to apply for financing, up from 25 percent last year, Shirey said.
“I think the regulatory impact (from Washington, D.C.) has been felt more strongly on consumer lending, particularly mortgages,” Shirey said. “On the small business side, I don’t think the impact of regulations has been as pronounced.
But more banks are paying attention to the key fundamentals of credit, and regulators are challenging more underwriting than in the past.”