Confidence among America's small-business owners has slipped since April, according to the latest CNBC/SurveyMonkey Small Business Survey, released Monday. The survey revealed the attitudes of 2,282 small-business owners nationwide across a wide spectrum of industries.
The survey's Small Business Confidence Index fell from 60 in the second quarter to 57 in the third quarter. The index is calculated on a scale from 0–100 and is based on the responses to eight survey questions. A zero indicates no confidence, and a score of 100 indicates perfect confidence. An index value of 57 means that business owners on the whole are more optimistic than they are pessimistic about the direction their business will head over the next 12 months.
The slight dip in confidence is the result of sharp decreases in the number of small-business owners who are optimistic about the impact of changes in tax, trade, regulatory and immigration policy over the next 12 months.
Only 27 percent of respondents say they expect changes in government regulations to have a positive effect on their business over the next 12 months. That's down from 38 percent who said the same in April, while the number saying regulation will have a negative impact on their business rose from 26 percent to 30 percent.
On tax policy, 31 percent now say changes will have a positive impact, down from 42 percent in April. Those saying changes in trade policy will have a positive impact declined from 27 percent in April to just 18 percent in August.
The declines make it hard to ignore the connection between small-business confidence and small-business owners' feelings about President Donald Trump. The numbers infer that both Republican and Democrats are less inclined to believe major policy changes will happen.
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For Republicans that means the policy changes won't give their business the boost they had been expecting. As a result, confidence among Republican small-business owners fell from 70 in April to 63 in August, according to SurveyMonkey's index calculation. Republican support for Trump also eroded over the spring and summer. Eighty-seven percent approve of the job the president is doing, down from 91 percent in April. The 54 percent who strongly approve is down from 61 percent.
For Democrats the same belief that policy changes won't happen yielded a positive reaction. Confidence among Democrat small-business owners increased from 47 to 51.
Confidence among independents ticked lower by just one point — from 55 to 54. Independent support for Trump also declined.
For the second straight quarter, male small-business owners remained more confident than female small-business owners. Confidence among men fell from 62 to 60, while confidence among women fell from 56 to 54.
What types of businesses have the most optimistic outlook? Small firm in finance and insurance saw the biggest rise. Confidence level for these sectors hit 66 from 63 in the second quarter.
The CNBC/SurveyMonkey Small Business Survey was conducted from a national sample of self-identified small-business owners, selected from the nearly 3 million people who take surveys on the SurveyMonkey platform every day. Results have a margin of error of +/-3.5 percentage points.
The survey data was conducted using SurveyMonkey's online platform and based on its survey methodology (https://www.surveymonkey.com/mp/survey-methodology/).