Economic Confidence On the Rise
Last week, confidence on Wall Street was sent soaring to all-time highs following the April jobs report from the U.S. Department of Labor—employers added 165,000 jobs for the month and unemployment fell to its lowest point since the end of 2008. The confidence of entrepreneurs is on the rise as well according to the latest Startup Confidence Index.
Eighty-four percent of entrepreneurs said they are confident or very confident in their companies' prospects for profitability in the next 12 months, which is the highest confidence level since the survey launched early last year and reflects a 1 percent increase over the fourth-quarter 2012 survey.
Of course, those figures were compiled prior to the jobs report and subsequent spike on Wall Street. This point is clear as entrepreneurs' faith in U.S. economic growth deteriorated from fourth quarter 2012. Just 39 percent said they expected the economy to improve over the next 12 months, compared to 44 percent in the previous quarter's survey. If the questions were asked today, those figures would probably be much higher.
Confidence levels of the youngest entrepreneurs – those 18 to 30 years old – started to rebound, as 96 percent reported they were confident or very confident that their businesses' profitability will increase in the year ahead, a 3 percent jump over fourth quarter 2012. Confidence levels among other age groups decreased as the entrepreneurs' ages increased. Nevertheless, even entrepreneurs aged 61 and older – the oldest category – expressed 73 percent confidence in 2013 profitability.
The Kauffman Foundation sponsors the Startup Confidence Index surveys in conjunction with LegalZoom, a leading national provider of online legal solutions and legal plans to young companies.