PULLMAN, Wash. — Planning business activities in the face of Washington’s robust economy emerges as a primary concern for the state’s small business owners, according to a survey conducted by the Washington State University Small Business Development Center (SBDC).
According to Stuart Leidner, SBDC coordinator for research and innovation, responses to the survey indicate that several years of solid economic growth leave the small business community “guardedly optimistic” over the prospects for continued expansion of the state’s economy. Meanwhile, the growing economy raises concerns among small business owners about recruiting and retaining qualified employees.
When asked if they see the state’s economy expanding, staying the same or declining in the coming year, a majority (58 percent) sees further expansion. This response represents a decrease from the 70 percent who predicted expansion last year.
“After several year’s of steady growth in the state, business owners may be a bit uncertain as to how long it will continue,” Leidner said. “Most of the difference between last year’s response and this year’s response is accounted for by an increase in the number of people who responded that they ‘don’t know’ what the economy will do.
“The results indicate that small business owners are still very optimistic about the coming year, they’re just being a little more cautious,” he added, “and this view seems to hold true in every region of the state.”
Leidner said only 3 percent of the respondents predicted a decline in the state’s economy, while 22 percent saw things staying the same. There was no significant difference in these figures when they were broken down by region.
Despite their cautious outlook on the state economy, small business owners show a high degree of optimism toward their local economies. Sixty-five percent predict their local economies will expand in the coming year, while 24 percent say it will remain the same.
Leidner said much of this result “is fueled by the exuberance of businesses in the Puget Sound region.” Seventy-five percent of the business owners in the “Urban Area” category, which comprises King, Pierce and Snohomish Counties, predict expansion in the local economy, while 43 percent of Eastern Washington and 50 percent of Central Washington make the same predictions.
“Business owners outside the Puget Sound area tend to see things remaining the same in the coming year,” Leidner said. “Once again, we are seeing a cautious optimism among small business owners.”
Leidner said one aspect of Washington’s strong economy showed up when business owners were asked what would be the most important problem they will face in 1998. Personnel management clearly outdistanced any other category as the most important problem. Twenty-two percent cited this category, up from 14 percent last year. The next closest category, competition, was cited by 10 percent of the respondents.
“The growing importance of personnel management may reflect the increasing competition for qualified workers in a state economy marked by relatively low unemployment,” Leidner said.
In its 11th year, the Washington State Small Business Forecast looks at how small business owners and managers perceive economic conditions for the coming year. The SBDC’s Lead Center at WSU interviewed 872 randomly selected businesses in the state from December 11–31. The survey is funded, in part, by the federal Small Business Administration.
Leidner said learning how small business owners view the coming year provides some indication of how they will plan their business activities. The results allow the SBDC to better plan its small business counseling activities and training programs.
The Washington SBDC, part of WSU’s College of Business and Economics, is the lead office for 23 education and 24 counseling centers statewide. These centers provide small business counseling, training and research services in conjunction with the U.S. Small Business Administration and the Economic Development Administration.

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