A new study by Wells Fargo shows that, following the 2024 presidential election, commercial business sentiment reached the highest sentiment index score recorded in the past four years (112.9, up from 102.3 in Q3 2024). Between November 15-November 22, 2024, 307 commercial companies with annual revenues ranging from $10 million to $500 million were surveyed about the state of their businesses, the economy, growth opportunities, and areas of concern.
Wells Fargo’s 2024 Q4 Commercial Business Sentiment Report shows that companies reported increased optimism about the state of their businesses, now that the outcome of the election is known. They also showed similar optimism for demand for their products/services, and their expectation for overall economic improvement in both the near and long term. Fifty-one percent of companies expect an improved U.S. economy in the next 12 months and 63% expect an improved economy in the next five years.
“The highly positive commercial sentiment recorded in Q4 was likely driven by the elimination of election unknowns, which typically delay business decisions and tend to raise concern,” said Mary Katherine Dubose, head of Specialized Industries for Wells Fargo Commercial Banking. “The second highest commercial sentiment index score we have recorded was in Q2 of June 2021 (111.7), following the release of the Covid vaccine, another time when businesses saw a clear way forward after a time of uncertainty.”
Key Findings Include
How companies feel about the state of their businesses:
- Current state of business compared to 12 months ago: 19% said their business was worse-off vs. 29% that said their business was better-off.
- Expected state of business in the next 12 months: 6% expect worse vs.43% that expect an improvement.
- Expected demand for goods/services in the next 12 months: 4% expect low
How companies feel about the state of the economy:
- Expected state of the U.S. economy in the next 12 months: 13% believe the economy will be worse vs. 51% that expect it to be better (an increase from 22% in Q3).
- Expected state of the U.S. economy over the next 5 years: 13% believe the economy will be worse vs. 63% that expect it to be better (an increase from 44% in Q3).
Top factors that improved business in the last three to six months:
- 35% of businesses identified improved efficiency
- 29% of businesses identified their growing customer base
- 27% identified reduced fuel costs
- 27% identified interest rates stabilizing (a 7% increase from Q3).
Top concerns impacting commercial business financial conditions:
- 57% of companies identified inflation as the top factor negatively impacting their company.
- Top three concerns: 70% cited increased prices and costs; 49% cited reduced demand for goods and services; 48% cited the possibility of prolonged economic recession; and 46% citing hiring/retaining employees
Click here to read more on Wells Fargo’s 2024 Q4 Commercial Business Sentiment Report.
