Is Recovery On the Way?

Fifty-two percent of small-business owners expect an economic turnaround next year, according to Administaff Inc.’s latest business confidence survey.

Thirteen percent of respondents say they feel a rebound is already under way, while 21 percent think a recovery won’t come until 2011 or later.

More than three quarters (76 percent) of business owners cite the economy as one of their biggest short-term concerns. But that’s down from 83 percent in July.

Other short-term worries: 50 percent point to health-care reform, 41 percent cite difficulties in controlling their operating costs and 39 percent note rising health-care expenses.

Meanwhile, 48 percent of those surveyed expect sales to increase over the remainder of the year and into 2010. That’s up from 41 percent in the second quarter.

Based on data from more than 5,900 small and mid-sized businesses, Administaff says average compensation is up 0.9 percent from the third quarter of 2008, while bonuses are down 0.9 percent and commissions have increased 4.1 percent.

“Small and medium-sized businesses are signaling that they are cautiously optimistic about an economic rebound in 2010,” says Paul Sarvadi, Administaff’s CEO. “However, current political uncertainty appears to be a significant factor slowing the pace of recovery.”

In the survey conducted late last month, 61 percent of the participants said they are maintaining current staffing levels, while 28 percent are adding new positions, up from 23 percent three months ago and 18 percent six months ago.

Eleven percent cited layoffs as a current management strategy, down from 16 percent in July and 19 percent in May.

Administaff surveyed CEOs, chief financial officers and other executives in a range of industries at its client companies throughout the U.S.

Texas-based Administaff provides small and midsized businesses with administrative relief and benefits. The company operates 50 sales offices in 23 major markets.