The economy continues to improve and economists are becoming more optimistic about near term economic growth and job creation.
Data from several sources is showing that smaller small businesses are starting to see the effects of the recovery. The April Discover Small Business Watch, a survey of firms with fewer than 5 employees, shows a strong increase in the number of small business owners who see economic conditions for their own businesses improving.
Later this week the Intuit Small Business Employment Index will be released. This index looks at employment trends for companies with fewer than 20 employees. The index started showing modest job growth last year. I'm confident the April report will show a continuation of this trend.
Small businesses in general are lagging behind large corporations in benefiting from the recovering economy. Larger firms have better access to stronger international markets, credit and government stimulus spending. Many large public corporations are reporting strong Q1 earnings, and raising their earnings estimates for the rest of the year.
As the economy continues to recover, so will the the fortunes of small businesses. They will benefit from large firms increasing their purchases from small suppliers, and stabilizing labor markets will lead to improved consumer sentiment and spending.
We expect this "trickle down" recovery will gain steam as the year progresses and more firms participate.