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California's Economic Outlook shows Slow & Steady Recovery

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California's Economic Outlook shows Slow & Steady Recovery

New survey shows California Small Business Economic Sentiment in unprecedented geographic detail. Broad improvement seen over 2+ years of Data collected so far from survey of more than 10,000 ntionwide respondents.

Thumbtack.com today released the Thumbtack Small Business Sentiment Survey, a first-of-its-kind survey that captures the economic sentiment of more than 10,000 small businesses nationwide on a monthly basis, including 14,766 responses over two years in California. Starting today, and released on a monthly basis going forward, the survey and accompanying visualization allow anyone to explore American small business economic sentiment at the national and local level. Designed with Bloomberg, all data will be housed and integrated seamlessly into the economic functions of the Bloomberg Professional service.

The U.S. Economic Census shows that over 90% of small businesses in the United States have five employees or fewer. Thumbtack’s survey is the first small business survey whose respondents reflect this specific demographic. While there are various indexes and surveys that seek to measure small business sentiment, there are no other surveys that have enough responses from businesses of this size to examine results at a state or city level.

Via its network of more than 150,000 active service professionals, Thumbtack has the unique capability to regularly survey this otherwise difficult-to-reach population.

“We are excited to be able to share this new survey, which will capture the sentiment of thousands of small businesses nationwide on a monthly basis,” said Jon Lieber, Chief Economist of Thumbtack. “Many of these business owners have few or no employees, and are often overlooked in other widely-tracked business surveys. We hope to offer new insights and a better understanding into what’s happening in this critical segment of the nation’s workforce and the American economy.”

The inaugural version of the survey shows a slow and steady recovery among California’s smallest businesses: 

  • Economic sentiment for California small businesses has improved 5% over the past year. However, that is significantly below the national average of a 7% increase over the past year.
  • California's small businesses ranked #33 nationally for overall economic sentiment in both March and April, in the bottom 40% of all states.
  • The state's businesses reported slightly lower expectations for inflation in April versus March. Over the past year, however, their inflation expectations have risen 3% -- slightly higher than businesses nationally.
  • Just like business owners elsewhere in the country, California small business owners are overwhelmingly optimistic about the future, rating their expectations of their future financial condition consistently 25 to 30 points higher than their perceptions of their current financial situation.
  • • Reported job openings stalled in April over March, declining 1.5% during that time period.

The full results for California can be seen here and include how businesses in each area responded to survey questions, and hundreds of quotes from small businesses nationwide. Each state and city also has its own dedicated webpage showing detailed survey results for that area.

Bloomberg Professional service customers can access this data and additional industry level analysis at {ECST T TACKUSBS }.

Survey methodology

Thumbtack.com has surveyed tens of thousands of small businesses quarterly since December 2012. The survey asked questions about how small businesses are feeling about the general economic environment and health of their business, such as:

  • How would you rate your company’s financial situation today?
  • Have you attempted to fill any part-time or full-time positions over the past three months?
  • How do you expect the prices you charge to your clients or customers to change over the next three months?

 Thumbtack.com and Bloomberg then used the survey responses to create a weighted index that demonstrates Small Business Economic Sentiment in one easy-to-understand number between 0 and 100 - an index score above 50 means sentiment is positive; an index score below 46 means sentiment is negative.  The full methodology paper can be found here. Beginning in March, 2015, Thumbtack began collecting results monthly for this new survey. Survey results will be released the last week of the month going forward.

For more information about the survey or the methodology, please email Thumbtack’s Chief Economist Jon Lieber at jon.lieber@thumbtack.com.