The economy may be in recovery, but small businesses in the U.S. aren’t really feeling it. The latest findings from Capital One’s Spark Business Barometer found a significant decline in small business optimism this year compared to their sentiments this time last year, reports said on Monday (May 2).
“Now is a critical time for small businesses as the country anticipates a change in leadership and new opportunities and challenges, such as market dynamics and new regulations and tax laws, which can have a significant impact on business results,” stated Capital One Head of Small Business Banking Keri Gohman in announcing the results of the report.
The barometer recorded a 9 percent decline in the percentage of SMEs that consider current market conditions “good” or “excellent” compared to the 2015 report.
Researchers also found a drop in the number of businesses that plan to increase their staff: 26 percent said they plan to boost hiring in the next six months, compared to 32 percent that said the same this time last year.
In 2015, 50 percent of small businesses said current business conditions are “excellent or good.” That figure dropped to 41 percent this year, researchers said.
Plus, more businesses are labeling current conditions as “poor” this year, with 19 percent making this conclusion in 2016, up from 15 percent last year.
Capital One did uncover good news, however. The report concluded that 39 percent of small businesses are remaining optimistic and stating that they expect to be in a better position financially over the next six months. That’s a 1 percent increase from last year — modest, but existent, nonetheless.
According to researchers, the upcoming presidential election is a top concern for small business owners; a quarter of those surveyed cited the election as their primary concern for their business, even more than competition, hiring staff, retaining talent and regulation.
Additionally, analysts found that businesses are increasingly looking to temporary, part-time employees and contractors instead of hiring full-time staff. Millennials are more optimistic about the next six months than business owners over the age of 50, researchers said.
Finally, Capital One pointed to a gap in the use of technology and digital tools by these small business owners. Just 21 percent reported using data analytics to help inform their business decisions, while 40 percent said they don’t use social media for their business at all.