Small-business confidence held steady in the fourth quarter, as a plurality of owners expect Congress to deliver on GOP tax cuts in the new year, according to the latest CNBC/SurveyMonkey Small Business Survey, released Monday. The survey revealed the attitudes of 2,043 small-business owners nationwide across a wide swath of industries.
Forty-four percent of small-business owners surveyed say overall business conditions are good, up from 39 percent in the third quarter.
The survey's Small Business Confidence Index remained at 57, unchanged from the third quarter. That indicates that small-business owners remain more optimistic than pessimistic about the direction their business will go in the next 12 months. The index is calculated on a scale from 0–100 and is based on the responses to key questions. A zero indicates no confidence, and a score of 100 indicates perfect confidence.
The survey found a close relationship between confidence and expectations that tax reform will become law by the end of the year. That may be because more than a quarter of small-business owners polled said taxes are the most critical issue currently facing their business. The 33 percent of business owners who expect lower taxes in 2018 have a confidence index of 70; the 31 percent who expect higher taxes next year have a confidence index of 44.
The overall confidence index was held in check by a more polarized view of economic conditions, as business owners were more likely to hold non-neutral views across the index's eight component issues.
While the percentage of small-business owners who say conditions are "good" rose by 5 points from the third quarter, those who say conditions are bad ticked higher by 1 point from 10 percent to 11 percent. Twelve percent now expect revenues to decrease over the next year, up from 10 percent in the third quarter, while the number expecting higher revenues rose by just 1 point. The percentages of small-business owners with negative views on tax policy, technological change and immigration all increased as well.
Support of or opposition to President Donald Trump is also closely tied to confidence level. The 53 percent of small-business owners who approve of Trump's job performance have a confidence index of 67, up from 65 in the third quarter. Those who disapprove of the president's performance have a confidence index of 47, down from 49 in the third quarter.
Trump picked up the most support from owners of C-corporations. Approval of the president's job performance among that group jumped nearly 20 points, from 48 percent in Q3 to 67 percent in Q4. This is likely because C-corporations see themselves as major beneficiaries of tax reform.
The CNBC/SurveyMonkey online poll was conducted Nov. 20–Dec. 4, 2017, among a national sample of self-identified small-business owners ages 18 and up. Respondents were selected from the nearly 3 million people who take surveys on the SurveyMonkey platform each day. Responses have a margin of error of +/-3.5 percentage points.