Executives from midsize and small businesses feel dramatically better about the U.S. economy than a year ago, according to the 2017 JPMorgan Chase & Co. Business Leaders Outlook report released Wednesday.

Middle market executives are twice as optimistic – 80 percent, up from 39 percent – about the U.S. economy than they were last year. Also, 62 percent of small business owners are bullish about the U.S. economy, up from 43 percent. Both groups feel even better about their own company’s prospects.

“U.S. companies are gaining confidence, and they anticipate new economic support from Washington in the coming year,” said Jim Glassman, senior economist at JPMorgan Chase. “Even some of their top business challenges – managing labor costs and trying to tap a limited supply of talent – are more growing pains than survival tactics.”

In fact, 76 percent of middle market executives and 61 percent of small businesses expect that the new administration will have a positive impact on their business. They want the government to focus first:

  • Reducing regulations (middle market at 67 percent, small business at 40 percent); and
  • Lowering taxes (56 percent, 57 percent).

Middle Market Businesses

Executives expressed the most optimism in the survey’s seven years:

  • Their company: 84 percent, up 14 points from 2016
  • Local economy: 68 percent, up 18 points
  • Global economy: 30 percent, up 20 points

They see their top business challenges as:

  • Revenue/sales growth: 71 percent, down 3 from 2016
  • Managing labor costs: 46 percent, up 6 points
  • Limited supply of talent: 44 percent, up 4 points

The regulations they are most concerned about are:

  • Healthcare: 63 percent, down 5 points from 2016
  • Labor: 44 percent, up 5 points
  • Fiscal policy: 42 percent, down 6 points

Small Businesses

Small business executives are optimistic for the year ahead:

  • Their company: 71 percent, flat from 2016
  • Local economy: 55 percent, flat
  • Global economy: 41 percent, up 14 points

They see their top business challenges as:

  • Growing revenue/sales: 38 percent, down 10 points from 2016
  • Uncertainty of economic conditions: 34 percent, flat
  • Taxes: 28 percent, flat

The regulations they are most concerned about are similar to last year’s:

  • Taxes: 46 percent, flat from 2016
  • Healthcare regulation: 44 percent, up 3 points
  • Payroll/employment taxes: 42 percent, flat