LAS VEGAS — For the sixth straight year, Nevada State Bank has released a report on its annual survey of small business owners and managers throughout Nevada.
The report reveals overall optimism about the local and national economies, though it does show some tempering of last year's buoyancy.
The statewide survey by local firm Applied Analysis was conducted during January on behalf of Nevada State Bank. To ensure it is statistically significant, the bank surveyed more than 400 small business decision makers, including owners, operators and executives representing Nevada businesses with annual sales ranging from $250,000 to $10 million.
The Bank's annual survey asked questions about the economy, business environment, revenue and profitability, employment, community involvement and the overall outlook for small businesses in Nevada. Highlights of this year's survey include:
Just over 71 percent of small business respondents believe the national economy is heading in the right direction. However, this is a decrease of 11.2 percentage points from 82.6 percent a year ago.
More than 81 percent of those surveyed believe Nevada's economy is headed in the right direction.
The top concerns for businesses continue to be healthcare costs, government regulation and business taxes — while their biggest challenge is hiring and retaining quality employees.
Nearly 3 in 5 respondents believe Nevada's business environment has gotten better over the past year. In addition, more than half (53.5 percent) of small business respondents saw increases in their business revenues or sales over the past 12 months.
Roughly two-fifths of respondents reported increased business profitability, an increase of 3.2 percentage points from 40.8 percent in the prior year.
A majority of respondents believe that interest rates will increase over the next year. More than half (50.2 percent) of respondents expect interest rates to increase modestly in 2019, following the rate increases in 2018.
More than 39 percent of respondents are in favor of using incentives to attract new businesses and investments to the state.
Roughly 38 percent of respondents believe that bringing major sporting events to Southern Nevada will have a positive impact on their small business.
“This year's results show relatively high levels of confidence, especially in the local economy,” said Terry Shirey, president and CEO of Nevada State Bank. “We anticipated a tempering of optimism after the record high in 2018. We compared data from all six surveys, and while the expectations have been exceeded, the respondents have never over-forecast their outlook. This year, nearly half of the respondents expect Nevada's business environment to get better over the next year, and 60 percent expect their revenues or sales to increase over the next year.”
As for regional differences, business owners in Northern Nevada were more concerned than their counterparts in Southern Nevada about whether housing is becoming less affordable for average Nevadans. Statewide, more than 56 percent of respondents were either moderately or very concerned about the price of available housing in their communities. In Northern Nevada, more than 47 percent said they were very concerned about this issue, while fewer than 23 percent of Southern Nevadans said the same.
Consistent with past years, the survey showed small business owners throughout Nevada continue to face challenges in recruiting quality employees. More than 69 percent said it was somewhat or very difficult for them to recruit quality candidates, up less than 1 percent from last year's survey. A shortage of candidates with sufficient experience was the most common reason cited for this challenge, as well as difficulty finding candidates within the market.
“Healthcare costs, housing, quality employees—are all continued concerns in our state,” added Shirey. “But consistent increases in revenue or sales and nearly 98 percent of respondents planning to maintain their employment levels or hire additional employees—those are really great indicators and confidence builders for business in Nevada.”
This article was provided to the NNBV by Nevada State Bank. To download a copy of Nevada State Bank's 2019 Small Business Survey report, visit www.NevadaSmallBusiness.com/survey.