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Small Businesses

Small business owners' economic confidence reaches its peak since Biden assumed office.

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Lauren Miller

April 20, 2024 - 02:30 am

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Rising Economic Optimism Among Small Business Owners

The quarterly CNBC|SurveyMonkey Small Business Confidence Index has reached its highest level since President Joe Biden's inauguration in 2021, indicating a surge in economic confidence among business owners.

Positive Economic Sentiment Despite Lingering Inflation Concerns

Despite persistent inflation concerns, small business owners are expressing a more positive outlook on the economy. According to the latest quarterly data released, 28% of small business owners view the current state of the economy as "excellent" or "good," marking a five-percentage-point increase from the previous quarter and a significant rise from 18% year over year.

Optimism Peaks Since Survey Initiation

The Small Business Confidence Index, registering at 47 out of 100, represents the highest reading since President Biden's inauguration in the first quarter of 2021. This optimism is notable as it signifies the most positive response recorded since the CNBC and SurveyMonkey collaboration began in the second quarter of 2022.

Survey Insights and Methodology

The Q1 survey, conducted online from January 22 to February 1, 2024, gathered responses from a national sample of 3,119 self-identified small business owners aged 18 and above, utilizing SurveyMonkey's established methodology.

Inflation Remains a Top Concern

Although economic optimism is on the rise, inflation continues to weigh heavily on the minds of small business owners. Nearly a third of respondents identified inflation as the most significant risk to their businesses, overshadowing concerns about consumer demand, interest rates, labor shortages, and supply chain disruptions combined.

Shifts in Confidence and Evaluation of Policy

Confidence in the Federal Reserve's ability to control inflation has increased to 35% among small business owners, the highest level recorded since the beginning of 2022. Additionally, the proportion of owners (29%) believing that inflation has peaked is at its highest since early 2022.

Election-Year Considerations

Inflation and interest rates rank as the top issues for small business owners when evaluating candidates for the 2024 election, alongside economic growth and tax policy.

Impact on Small Businesses

John Morman, owner of Celtic Tides, a small retailer based in Lexington, Virginia, highlights the challenges his business faces due to rising costs associated with imports. Morman notes that while costs have increased by as much as 15%, consumer spending remains a concern, impacting his pricing strategies. Despite the challenges, Morman remains cautiously optimistic about the year ahead for his business.