How’s Main Street America Holding Up?
September 5, 2019
- Small business confidence remains high, despite some headlines saying otherwise
- The changing business landscape of Mount Clemens
- Consumer confidence drives the economic train
Six months ago, record high consumer confidence and optimistic business owners pretty much dominated the headlines. According to Todd McCracken, President and CEO of the National Small Business Association, “businesses are feeling pretty good, the economy is doing well, and confidence is still at high levels.”
So what about now, six months later when there seems to be a gajillion new articles a day about how the economy is getting ready to tank? Contrary to those negative headlines, business confidence and optimism are still high.
Small business confidence is holding up strong.
According to a recent CNBC survey, 58 percent of business owners still expect revenues to increase in the next 12 months. In July, NFIB President and CEO Juanita D. Duggan reiterated the economy’s strength, saying “while many are talking about a slowing economy and possible signs of a recession, the 3rd largest economy in the world continues to defy expectations, generating output, creating value, and expanding the economy.”
So what are business owners worried about?
While some business owners noted problems beyond their control, like the weather in the midwest, or the potential for tariffs to have an impact on their business, small business optimism is still defying expectations. And even if there is choppy water ahead, some owners are taking it as an opportunity to grow their business. Matt Laricy, an entrepreneur from Chicago, has been saving money on the side so that in case a downturn does it, he can afford to advertise more than other businesses. If necessary, he plans to “double down on advertising while everybody else is falling out” in order to get more business.
Mount Clemens sees a changing business landscape
It looks like most of the mom-and-pop stores you shop at when spending a day downtown have been doing pretty well, and still are. According to a July survey by the National Federation of Independent Business, “small business owners who believe the economy will be better in six months exceeded those who said it would be worse by 20 percentage points.”
In Mount Clemens, a few closures do not seem to be tempering enthusiasm. Earlier this year, “the Clem” has seen a few businesses move outside of their downtown–only, naturally, leaving space for new businesses to move in.
Michelle Weiss of the city’s Downtown Development Association said that while the city will miss those businesses that left, she’s confident in the interest she’s seen in these locations from new businesses…not to mention the results some have already seen. Like Pops’ Sweets An Treats and Thirty4: both relatively new family-run businesses that have been thriving in the area.
Consumer confidence hasn’t come down.
The biggest sign of any economic downturn is how consumers feel about spending money. As any economist will tell you, “the consumer drives the economic train”. When consumers fear a bad economy, they spend less, and confidence goes down. When consumers think the economy is just fine, they spend more, and confidence remains high.
So how do we know consumers are still feeling confident? Because they’re spending more. The number of people planning to take vacations is up two percent, four percent more people are flying (even with higher airfares), and major retailers like Walmart and Target are showing an increase in sales.
While there may be economic headwinds like bad weather for farmers, trade disputes for retailers and negative interest rates for homebuyers, the data from small business owners and consumers are showing that it’s probably not time to drink from the recession kool aid.