CNBC And SurveyMonkey Report Small Business Confidence Is Weakening

"The steady, high confidence among small business owners that we tracked throughout 2018 is weakening to close the year,” according to SurveyMonkey.

CNBC, First in Business Worldwide, and SurveyMonkey, a leading global survey software company, recently announced the results of their quarterly CNBC/SurveyMonkey Small Business Survey.

Each quarter, CNBC and SurveyMonkey poll over 2,000 small business owners to measure the vitality of the American economy as well as the view from Main Street on jobs, taxes and other hot topics. In addition to measuring small business confidence nationwide, the large sample size gives CNBC the power to uncover trends by geographic region and among specific small business cohorts.

Key findings from the Q4 2018 CNBC/SurveyMonkey Small Business Survey include the following findings.

 

Those who say conditions for business are ‘good’ take a slight dip

After five straight quarters of gains, those who say conditions for business are currently “good” dipped from 58% to 55%. That question is just one component of the overall small business confidence index score, which also decreased from 62 to 59 this quarter.

 

Small business owners still anticipate revenue increases in the next 12 months

This dip is reflected across nearly all demographic groups, with the exception of Democrats who held steady, and those who disapprove of President Trump and have become slightly less pessimistic this month.

Fifty-eight percent (58%) of small business owners expect their revenue to increase over the next 12 months, down from 62% in Q3 and 60% in Q2.

 

Hiring expectations are down marginally from previous quarters

On a parallel path, 29% of small business owners plan to increase headcount over the next 12 months, down marginally from 33% in Q3 and 31% in Q2. Eighteen percent (18%) of respondents have had open positions for at least 3 months that they have been unable to fill.

Of those with open positions, 56% have offered higher wages, 31% have offered to pay for training/additional education and more than 10% have offered to help pay candidates’ student loans, relaxed drug policies or considered candidates with criminal records for the first time in order to attract qualified workers.

 

More than half of business owners report trade policy will have ‘no impact’ on their businesses in the next year

Overall, views on trade moderated slightly. Fifty-five percent (55%) say changes in trade policy will have “no impact” on their businesses in the next year, up from 47% in Q3.

Subsequently, the number expecting either a positive or negative impact fell. The 16% who say trade policy will positively affect their businesses over the next year is a new low. However, small businesses that do business in China are nearly twice as likely as those who don’t to say trade will have a negative impact.

Nineteen percent (19%) of business owners believe the most important priority for the next Congress is to cut spending/reduce the deficit, followed closely by immigration (18%), healthcare (17%), and increased oversight of the Trump administration (15%.)

 

Small business confidence is weakening with diminished expectations in key areas

“The steady, high confidence among small business owners that we tracked throughout 2018 is weakening to close the year,” said Jon Cohen, chief research officer at SurveyMonkey. “Our data show diminished expectations around regulation, tax policy, and trade as leading the downturn in what had been sky-high confidence heading into 2019.”

For more information on the survey including the full results and methodology and in-depth articles, visit CNBC.


Survey methodology

SurveyMonkey created a unique Small Business Confidence Index (SBCI), which is a 100 point score based on responses to eight key questions. The index is calculated on a scale from 0–100 and is based on the responses to eight key questions.

A zero indicates no confidence, and a score of 100 indicates perfect confidence. Last quarter, the SBCI was the highest it had been since CNBC and SurveyMonkey began polling businesses six quarters ago, tied with Q1 2017. The fourth quarter of 2018’s SBCI has fallen from an overall value of 62 to 59, indicating that small business owners are more optimistic than pessimistic about the direction their business will go in the next 12 months.

The CNBC/SurveyMonkey Small Business Survey was conducted using SurveyMonkey’s online platform from November 19 – November 29, 2018 among a national sample of 2,146 self-identified small business owners ages 18 and up. Respondents for this survey were selected from more than two million people who take surveys on the SurveyMonkey platform each day. The modeled error estimate for this survey is plus or minus 3.5 percentage points.

Data for this quarter have been weighted to be representative of small business owners nationally, according to business characteristics from the Small Business Administration’s 2013 Statistics of U.S. Businesses and owner characteristics from the Census Bureau’s 2012 Survey of Business Owners.

 

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