Small business sentiment can be — and has been — impacted in election years, with the prospect and threat of a changing regulatory and economic landscape looming. One of the latest reports to explore this phenomenon was published on Wednesday (May 4) by Wells Fargo and Gallup, which reached some troubling conclusions.
According to the firms' Small Business Index, which surveyed small business owners in the U.S. between April 4 and April 8 of this year, small business optimism declined, though only slightly. The levels were equal to those seen this time last year, researchers noted.
Other unsurprising findings included the resettling of cash flow projections back to normal levels after a slight improvement last quarter, along with only minor fluctuations in levels of optimism of a business owner’s financial situation, access to credit and spending plans, among other factors.
Unique this year, however, is the upcoming presidential election. While it hasn’t necessarily impacted small business optimism yet, Wells Fargo found the election weighs heavily on small business owners’ minds.
Researchers said 87 percent of those surveyed reported they are following election news either very closely or somewhat closely (56 percent and 31 percent, respectively).
Gallup said these percentages are significantly higher than average Americans.
Half of small business owners expect significant impacts on their companies resulting from the outcome of the election in November. But just 28 percent agree that the presidential candidates are adequately addressing their particular concerns — lower than the 58 percent of individuals who don’t own businesses, also surveyed by Gallup, that reported candidates addressing their concerns.
According to the poll, implications of tax regulations made the top of the list for small business owners, cited by 83 percent of respondents as their top issue. Further, 77 percent said economic policies that could impact small business owners were most important to them, followed by 73 percent that cited health care laws.
Each of these was rated as either extremely or very important to respondents.
“During this presidential election year, the latest Wells Fargo/Gallup Small Business Index shows the outlook of business owners has not changed significantly in the last year, both in their current situation and future outlook,” said Wells Fargo Head of Small Business Lisa Stevens in a statement. “While small business optimism over the past year has been higher than at any point since 2008, many business owners remain cautious about today’s economy and the year ahead.”