Even though small business owners have seen improvements in their businesses, they do not expect an economic rebound until the second half of 2011, according to a Business Confidence Survey released on Monday by Administaff.

The Houston, Texas provider of human resources services for small and medium sized businesses found that only 21% expect a rebound before mid-2011 and 47% expect a recovery in the last six months of next year. Thirty two percent are unsure.

Seventy-seven percent of small business owners listed the economy as the leading short-term concern, followed by 56% who listed government health care reform, 54% who mentioned rising health care costs and 37% who were worried about controlling operating costs. For the longer-term, 69% were either very concerned or had increased concerns about potential tax increases, 67% listed government expansion and the effect on business, 66% designated the economy and 65% cited the federal deficit.

Yet on average small business owners are doing better than they were in the third quarter of 2009. Administaff’s of 5,700 small- and medium-sized businesses, which was conducted from Oct. 19-21, 2010, shows average compensation is up 3.2%, bonuses are up 14.9%, and commissions were up 8.1% compared with less than 1% in July 2009. Overtime pay at 8.9% of regular pay was up from 8.1% last quarter and 7.5% in April, but was still less than 10%, which is the level that often prompts a need for additional employees.

Pipelines for new business are steady with 38% of respondents expecting sales to increase and 43% predicting it will stay the same.

“Owners and managers of small and medium-sized businesses are seeing signs of improvement in sales but remain cautious in their economic expectations,” said Paul J. Sarvadi, Administaff's chairman and chief executive officer. “However, many have hopes the election results may lead to a more favorable business climate and increased predictability for their businesses.”



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