Sixty-four percent of small business owners approve of the way Donald Trump is handling his job as president, the highest approval rating for Trump among entrepreneurs since CNBC and SurveyMonkey began conducting a quarterly survey in 2017.
The spike in approval among small business owners follows a pivotal period for Trump. This CNBC|SurveyMonkey Small Business Survey for the first quarter 2020 — which includes responses from more than 2,100 small business owners — was conducted the same week (Feb. 3–Feb. 10) as Trump's third State of the Union address, his impeachment acquittal and the Iowa caucuses. The percentage of small business owners who say they "strongly approve" of how Trump is handling his job reached 47%, also a new high; it had never been above 40% in previous surveys.
"This is a high watermark for President Trump's job approval, both among small business owners in our survey and among the general public," said SurveyMonkey senior research scientist Laura Wronski.
A recent Gallup poll found Trump's job-approval rating had risen to 49%, his highest in Gallup polling since he took office in 2017.
Small business owners are a consistent source of support for Trump, according to the CNBC|SurveyMonkey data — 60% approved of Trump's handling of his job in Q4 2019. It was 56% one year ago when the government shutdown weighed on his support from the small business community.
"Part of this is just partisanship," Wronski said. "One key way in which small business owners differ from everyone else is that they are more likely to be Republicans than Democrats by a pretty wide margin. That's not true among the general population, which is split almost evenly and even slightly skewed to the Democratic side. Trump's job-approval numbers are consistently higher among small business owners than they are in national polls, solely thanks to the fact that many more small business owners are Republicans than Democrats."
A huge percentage (93%) of Republicans approve of the job Trump is doing this quarter, and it was the same in Q4 2019.
A 6% spike among small business owners who identify as political Independents influenced the Trump approval bump in Q1. Quarter-over-quarter, Trump's job approval increased the most — from 37% to 43% — among these small business owners.
Ben Thomas, owner of Five Pound Apparel, a retail store in Springfield, Missouri, said that it's overall sentiment, not the president's economic policies, that has a more immediate and direct impact on businesses like his. "It's all about that positive vs. negative sentiment. None of us truly know the lasting impacts of pulling out of the TPP [Trans-Pacific Partnership], signing the new USMCA trade deal or the ongoing trade war with China," he said.
A majority of small business owners surveyed by CNBC and SurveyMonkey said recent trade deals will not have an impact on their business — 70% in the case of the "Phase 1" trade deal with China, and 69% in the case of the new North American trade deal with Mexico and Canada.
"What we do know is that it is at least being done under the pretext of putting American business first, and it feels good as an American business owner to have an administration that is at least trying to fight on your behalf, globally," said Thomas, who is not registered as either a Republican or Democrat.
Thomas said when looking at the economic platforms from many of the top Democratic candidates, particularly Bernie Sanders as the front runner, "I'll be honest … I get nervous as a business owner."
He worries specifically that policies seeming to go after "greedy corporations" may hurt small business owners the most. "The irony is that those businesses can afford to allocate resources to making those changes, but small businesses operating on already thin margins may see those margins evaporate, and thus their businesses," he said. "I believe their policies may be counterproductive by actually widening the gap of those large corporations' already sizable competitive advantage."
The survey found increased optimism among small business owners about the current state of their business — overall confidence hit its highest level since the third quarter 2018 — and decreased pessimism about the effect that regulatory, tax and trade policy changes may bring in the next 12 months as Trump seeks reelection.
Small business owners who do not approve of Trump's handling of his job express a variety of concerns that go beyond the current health of their business.
"While the small business I co-own could marginally benefit from a financial perspective with targeted tax breaks, my disapproval of Trump is unrelated to his tax policies. I'm more concerned about the Trump administration's effects on the environment, the escalating trade war with China and his gross abuse of power than any monetary self-interest," said Shannon Bhatia, co-founder of Los Angeles-based Macht Project, a social innovation lab that works with corporations and nonprofit entities.
"There are also concerns across industries about a pending economic recession. If that downturn does happen, small businesses like ours will be dramatically impacted for the worse, as larger corporations tighten their budgets and de-prioritize CSR [corporate social responsibility] efforts."
Among Republican small business owners responding the the survey, 43% said "jobs and the economy" matter the most to them right now — an issue that falls to 24% among Independents and 15% among Democrats. Fifteen percent of Independents and 28% of Democrats cited the environment as the most important issue. Twenty-nine percent of Democrats cited health care as the most important issue — that was 21% among Independents and 14% among Republicans.