Main Street is skittish about the incoming Biden administration, with 55% of small business owners saying they expect Joe Biden’s presidency to be bad for small businesses, versus 34% who expect it to be good for small businesses.
More small business owners now than at any previous point in the last three years anticipate negative effects for their businesses as a result of changes to government regulations, tax policy, and immigration policy in the coming 12 months. In this latest quarterly CNBC|SurveyMonkey Small Business Confidence Survey, 49% of small business owners said they expect negative effects due to government regulations, 53% said they expect negative effects due to changes in tax policy, and 25% say they expect negative effects due to immigration policy.
This quarter, the CNBC|SurveyMonkey Small Business Confidence Index dropped to a score of 48 out of a possible 100, a new low since the quarterly tracking survey began in 2017. This setback for small business confidence coincides with a post-election shift in overall consumer confidence, with Republicans’ outlooks souring following Joe Biden’s defeat of Donald Trump in the presidential election. A higher proportion of small business owners are Republicans relative to the numbers among the general population.
This downward turn in policy expectations comes despite the fact that small business owners’ hiring and revenue projects remain stable from the third quarter of this year, and their assessments of current business conditions have ticked up again after plunging in Q2. Just 18% of small business owners now say current business conditions are bad, down from 23% last quarter and 40% in the second quarter of this year. Meanwhile, 39% now say current conditions are good, a slight tick up from 36% last month but still down from the 56% high mark from the first quarter of this year.
Nearly a quarter of small business owners (23%) say they expect their staff of full-time employees to increase in the next 12 months, almost unchanged from last quarter’s 25%; 15% expect their headcount to further decrease, unchanged from last quarter.
Revenue expectations are also steady: 45% of small business owners say they expect their revenue to increase in the next 12 months (was 46% in Q3), while 31% expect it to stay the same (was 33% in Q3) and 23% expect it to decrease (was 20% in Q3).
Green shoots since Q3
Despite this reported steadiness, there are signs that things are improving for small business owners quarter-over-quarter.
Nearly four in 10 (38%) say their business’s revenue has increased in the past three months, up from just 25% who said so last quarter; correspondingly, the number of small business owners who say revenue has decreased fell from 51% to 36% in the same time period.
Demand is up slightly, too, with 41% now saying demand for their business’s core products or services has increased, up from 35% in July.
These improved results don’t yet extend to hiring. This quarter, 11% of small business owners say their headcount has grown in the past three months, essentially unchanged from 9% last quarter. Slightly fewer small business owners now than in the third quarter say that their headcount has decreased in the last three months (18% vs. 25%), perhaps indicating that the coronavirus-related layoffs have leveled off.
Two-thirds of small business owners (67%) say they can continue operating their business under current conditions for the next year or more, also nearly unchanged from last quarter’s (64%).
A large majority of small business owners (68%), continue to say the coronavirus outbreak is likely to have permanent effects on the way they run their business—essentially unchanged from 69% in Q3 and 71% in Q2.
Huge support for coronavirus stimulus package
Small business owners express overwhelming support, by an 83% to 15% margin, for the passage of a new economic stimulus package to help individuals and businesses impacted by the COVID-19 pandemic. From sole proprietorships to C corporations, and among firms of all sizes, support for such a plan is high across the board, never falling below three-in four small business owners of any particular subgroup in support.
The most popular form of stimulus on Main Street is the simplest: direct payments to individuals, which gets the support of fully half of small business owners. Rent and mortgage relief (42%), extension of the Paycheck Protection Program (41%), funding for COVID-19 testing and contact tracing (36%), funding for education and child care (33%), reinstatement of the $600 per week expanded unemployment benefits (28%), and relief for state and local governments (27%) all receive substantial support as well.
Among the general public, support for a new stimulus pack is similarly high: 89% of non-small business owners nationwide support a new economic stimulus, with 84% of Republicans, 90% of independents, and 96% of Democrats all expressing support.
The one proposal that receives more support among small business owners than among the general public is the extension/expansion of the Paycheck Protection Program, which provided funding to businesses in order to maintain their payrolls despite business closures and general drop in demand earlier this year. Hiring and retaining workers is always a challenge for small business owners, but it has been especially so in the pandemic.
Much like in the second and third quarters of this year, 11% of small business owners say they’ve had to furlough employees as a result of the COVID-19 outbreak, and a similar 12% have been forced to do layoffs. Of those who have furloughed or laid off staff members, just 22% now say they’ve hired all of them back and 35% have hired some back. These job losses are exactly the problem that the PPP had intended to solve, but it expired at the end of July.
Read more about our polling methodology here.
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