Arizona: Economic, regulatory concerns dampening optimism?

Nearly 1 in 5 Arizona small business owners is feeling pessimistic about prospects this year. 

Nearly 1 in 5 Arizona small business owners is feeling pessimistic about prospects this year. 

Highlights:

  • Arizona ranks #36 nationally for small business optimism
  • Some are concerned about national healthcare reform
  • The bigger concerns: regulations and the economy

Small business optimism is high nationally, but Arizona’s local merchants aren’t feeling it. The Grand Canyon State ranks #36 nationally for small business owner optimism, according to Womply’s national study. In Arizona, 63% of business owners report feeling optimistic about prospects this year, compared to 70% nationally.

What’s dampening spirits in the desert? One theory could be national turmoil over healthcare reform, a policy issue that has a direct impact on businesses and their employees. In fact, a top executive with the Arizona Chamber of Commerce recently told the state’s U.S. senators that the Obamacare replacement bill making its way through congress would harm the state’s economy.

Healthcare reform would be a tidy answer, considering our study revealed that health insurance is a top-10 worry for small business owners in Arizona and nationally. But the data tell a murkier story. Asked how Obamacare repeal would affect their business, a whopping 54% of Arizona business owners said it would have “no impact.” In addition, health insurance ranked well below taxes and business regulations as the third policy area Arizona merchants want changed.

So, what’s dragging them down if it’s not the drama-filled national debate over healthcare reform? Nearly 1 in 5 Arizona owners reports pessimism about prospects this year, and we asked them why. The top answers:

  1. The state/local regulatory environment
  2. Health of the state/regional economy
  3. Health of the national economy

Clearly, economic and regulatory concerns are weighing heavy on Arizona’s local business owners. Fear and uncertainty have a strong influence on how entrepreneurs operate their businesses, and the irony is small business owners have tremendous influence over the very economy that concerns them. Our study found that optimistic owners are 3.5x more likely to hire and give raises this year, and those activities have a positive compounding effect on the economy at large.

Read our full report below.