Happy New Year! (With a Focus on HAPPY!)

By at 1 January, 2019, 2:00 pm

Small Business Insider

Don’t get dragged down by the pessimists in 2019

By Karen Kerrigan-

If you’ve caught a glimpse of the news headlines over the past week or so, there seems to be many “experts” who see economic gloom around every corner. Those views largely appear to be influenced by overblown events or news that create panic signals for the markets, and the gyrations have been pretty intense.

Meanwhile, retailers have reported a record holiday shopping season, small business and manufacturer optimism remains at historically high levels, there are millions of great jobs available for those seeking a change or higher salary, wages are increasing, and the outlook of business owners is pretty solid for 2019.

Quite the contrast!

The entrepreneurs and small business owners I talk to on a regular basis and on my Main Street excursions have been watching the stock markets with….well let’s just say, curiosity. Perhaps a little uncertainty has crept into their outlook given the outcome of the 2018 elections and what this means for policy this year, but they are generally optimistic about revenue growth and business conditions for 2019.

And as I noted in my recent appearance on Fox Business (watch the December 27 clip by clicking the image below), the biggest worry for small business owners is not the economy or the prospect of an economic slowdown, but finding the human capital they need to take advantage of growth opportunities. In fact, according to the recent National Association of Manufacturers (NAM) Outlook Survey published on December 20, 2018: “The workforce shortage has forced more than one in four manufacturers surveyed to turn down new business opportunities.” There are 522,000 empty manufacturing jobs that are not being filled due to a lack of skilled workers, and more than 7 million job openings across various sectors.

Entrepreneurs definitely understand there will be a break in the pro-growth policy momentum of the past two years. The tax and regulatory changes and general direction of policy fueled economic growth, investment and confidence, and these changes will continue to pay dividends in 2019 and beyond.

There will definitely be a policy stalemate on some major issues on Capitol Hill. The House is expected to advance some anti-growth measures, but the Senate and White House will serve as a check against intrusive legislation that could harm the business environment. We will continue to work to advance positive policies that will help boost small business growth and entrepreneurship – like capital access and capital formation measures, targeted regulatory relief, health insurance cost relief by extending the moratorium on the HIT tax, broadband access for rural and underserved areas, tax code simplicity, and global market access. I am optimistic about bipartisan movement on some of these issues this coming year.  We will also focus on emerging issues that require small business advocacy – for example, a national framework on privacy rules, regulatory and policy threats to our health care system, and other issues that I will detail in our upcoming Policy Agenda for 2019.

Trade costs (tariffs) and uncertainties are affecting some small businesses, and the longer the dispute and tariffs endure, the more pervasive the impact on consumers, small businesses and the broader economy. This is the message that we have been delivering to the White House and the president’s team on a regular basis, and hopefully a resolution (or “deal”) with China will be emerging soon. After all, this is sucking a lot of time and effort away from trade negotiations with the EU and Japan, for example, as well as efforts to navigate the USMCA (the “new NAFTA” deal) through Congress.

Recently, I read an article about the “risks” of impeachment for the economy in 2019. Again, I had to roll my eyes. During the Clinton “impeachment period,” the economy experienced fantastic growth. In fact, during the House impeachment hearings and Senate trial, GDP growth clocked in at 4.88% for the last quarter of 1998, and 4.82% for the first quarter of 1999.  GDP growth was above 4% every quarter for the entirety of 1998 and 1999. The size of the U.S. economy – which will exceed $20 trillion in 2018 – is much stronger than any individual or institution, and for me it’s all comes down to policy in terms of what ultimately impacts the economy.  For former President Clinton, the tax package he signed into law in 1997 delivered a nice cut in the capital gains tax, which was a potent source of fuel for emerging technologies and a big boost for the economy during this period. Again, these events have to be put into perspective.

Business owners and entrepreneurs know what they need to do to stay on top of their business in good times and in bad: watch expenditures, closely monitor inventory, keep it up on the marketing end, remain in close contact with customers and peers to catch trends (including early signals of a potential slowdown), and always have a financial back-up plan.  Thankfully, they are still planning for growth in 2019, despite what many of the experts predict.

Be assured that SBE Council will be keeping it up on our end – monitoring policies and their movement and advocating on the side of small business – so that entrepreneurs are not caught off guard by policies that will hurt business competitiveness and growth. Like small business owners, we currently see good times ahead for our economy and we choose to be optimistic about 2019.

Happy, Happy New Year! And a prosperous 2019 to entrepreneurs and small business owners everywhere!

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.

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