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CNBC | Momentive Small Business Survey

Small-business optimism stays near record high despite threat of trade tariffs: CNBC/SurveyMonkey


Confidence among America's small-business owners remains near an all-time high, despite concerns about how the Trump administration's trade policies might impact businesses in the coming months. For the first time since CNBC and SurveyMonkey began taking the pulse of Main Street more than a year ago, a majority of small-business owners across the country say business conditions are "good."

The CNBC/SurveyMonkey Q2 Small Business Confidence Index dipped to 61, down from the record first-quarter reading of 62. The decline can be attributed to a sharp increase in the number of small-business owners who expect trade policy to have a negative impact on their businesses in the next year. That number rose from 17 percent in the first quarter, to 28 percent in this quarter's poll.

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. The quarter-to-quarter change is within the margin of error.

The CNBC/SurveyMonkey Small Business Survey, an online poll with responses from more than 2,000 small-business owners each quarter, was conducted from April 11–17.

"Concerns about trade having a negative effect on small business is at an all-time high this quarter," said SurveyMonkey's chief research officer, Jon Cohen. "This is the first time since we started doing the survey that we have a year-on-year comparison, and we've been asking about trade not just after the White House raised prospects of implementing tariffs, but we've been asking this question for five quarters."

A year ago more than a quarter of small-business owners (27 percent) thought changes in trade policy would have a positive impact on their businesses. Today that number has fallen to 18 percent.

"They are more apt to be selling things into other markets, most likely to be affected by trade," Cohen said. "More than a third of companies with 10 or more employees are worried about trade having a negative impact."

The May 1 deadline for steel and aluminum tariff exemptions for key U.S. allies, including the European Union, has now been extended for 30 days, the White House said, to allow for further discussions. Read the full story.

I think I've heard him say it may be a little bit of a small pain. 
Linda McMahon
administrator of the U.S. Small Business Administration, on Trump's tariff plan 

In recent weeks the Trump administration has admitted that its moves to enact tariffs and renegotiate trade deals may cause "short-term pain."

"I think I've heard him say it may be a little bit of a small pain," said Small Business Administrator Linda McMahon, speaking to CNBC on Sunday as part of an event to mark the start of National Small Business Week. "But from the small businesses that I have talked to, they are happy to be part of this whole program that in the long run … will be beneficial to them and our country."

President Donald Trump continues to receive high marks from this group. Fifty-nine percent of small-business owners approve of the way the president is handling his job. That number has stayed virtually unchanged in the past year.

Overall, optimism among small-business owners is most reflected in the record number of small-business owners who say business conditions are "good." This number has risen for four straight quarters, starting at 38 percent in the second quarter of 2017 and climbing to 53 percent in this quarter's poll. In additional signs of optimism, 60 percent expect revenue to increase over the next 12 months, and 31 percent expect to increase headcount.

By Kate Rogers, CNBC reporter, and David Spiegel, senior editorial manager, CNBC. The CNBC/SurveyMonkey Small Business Survey is conducted quarterly using SurveyMonkey's online platform and based on its survey methodology.