Key findings:
- Optimism about the state of the economy rebounds after a sharp decline in Q2, with nearly half of small business owners (46%) saying that the economy is “excellent” or “good”, up from 30% the previous quarter
- Fewer small business owners have been, or expect to be impacted by tariffs (59%, down from 66% in Q2), and slightly more than half (54%) are concerned about the impact of tariffs on their business (down from 59% in Q2)
- Nearly four in ten (37%) small owners currently use AI to help run or operate their business, with 37% also planning on increasing investment in the technology over the next 12 months
- Three quarters (75%) of small business owners who use AI in their business report a positive impact on their business
- More than half (54%) of small business owners say AI has already, or may reduce employee headcount: one in five (20%) say AI has already reduced employee headcount, while one in three (35%) say AI may do so in the future
Nearly half (46%) of small business owners are optimistic about the state of the economy, rebounding from (30%) the previous quarter
Nearly half of small business owners (46%) view the economy as ‘excellent’ or ‘good’, with optimism growing across party lines: 23% of Democrats say the economy is currently good or excellent, up from 8%% in Q2, while 67% of Republican small business owners have a positive view of the economy, 15 points higher than in the previous quarter (52%). Fewer small business owners think the country is headed for a recession (from 70% in Q2 to 61% in Q3).
Fears over inflation and tariffs diminish
Fears about inflation slightly temper, with 66% expecting the price of goods to rise, down from 72%. 32% think inflation has peaked, down from up from 27% in Q2. Small business owners remain wary, with inflation remaining small business’ biggest concern, with one in five (22%) citing rising prices as the biggest risk to their business currently.
Fewer small business owners are concerned about the impact of President Trump’s tariffs on their businesses, down from 59% in Q2 to 54% this quarter. Fewer are also bracing for their impact: 59% of small business owners expect Donald Trump’s tariffs to impact their business now (28%) or in the future (31%), down from 66% the previous quarter. Fears over tariffs as their biggest risk also decline from 17% in Q2 to 10% this quarter.
Four in ten (37%) small business owners use AI to help run their business, with one in five (20%) users report a reduction in headcount due to the technology
Nearly four in ten (37%) also expect to increase investment in AI tools and services for their business over the next 12 months, with larger businesses seeing greater adoption.
- 33% of small businesses with 0-4 employees currently use AI, on par with those with 5-9 employees (30%).
- Three in five (62%) small business owners with 50 or more employees cite usage of AI.
The majority (71%) of owners who currently use AI plan on increasing investment, while 17% of those who are not currently using AI expect to invest in AI. Once again, larger businesses overall see higher investment (75% of small business owners with 50 or more employees vs. 30% of those with 0-4 employees).
Most small business owners who use AI are bullish on the technology, with 75% citing a positive impact on their business (21% cite no particular impact, and 4% cite negative impact). AI has also impacted employee headcount: 54% of small business owners who use AI say AI has already reduced the number of employees (20%), or may do so in the future (35%).
Small Business Confidence rebounds back to 56, up from 51 the previous quarter, as small businesses owners optimism recovers across most aspects the economy:
- 44% describe current business conditions as good, up from 36% the previous quarter, and on par with Q1 (42%)
- 51% expect business revenue to increase in the next 12 months, up from 41% in Q2, and back to levels seen in Q1 (52%)
- 28% expect to increase employment in the next 12 months, up from 22% in Q2, and on par with Q1 (28%)
- 35% expect government regulations in the next 12 months to have a negative impact on their business, down from 44%.
- 32% expect tax policy in the next 12 months to have a negative impact on their business, down from 37%.
- 40% expect trade policy in the next 12 months to have a negative impact on their business, down from 51%.
Small business owners across the political spectrum see improving sentiment among Democrats, improving from 33 to 41 the previous quarter. Republicans remain at 68, while Independents at 47 remain on par with the previous quarter (45). Confidence in President Trump increases from 48% (in Q2) to 57% (this quarter) of small business owners approving and 42% (from 41%) disapproving of the way he is handling his job as president.
Small Business Confidence Index Methodology
This CNBC/SurveyMonkey online poll was conducted July 7-10, 2025 among a national sample of 1,900 self-identified small business owners ages 18 and up. Respondents for this survey were selected from the more than 2 million people who take surveys on the SurveyMonkey platform each day. The modeled error estimate for this survey is plus or minus 2.5 percentage points for the results among small business owners.
Weighting
Data for small business statistics have been weighted according to business and owner characteristics (industry, number of employees, geography, gender, and race) according to the 2022 Census Bureau’s Annual Business Survey (ABS).
Index calculation
The final small business confidence index (SBCI) is calculated according to the following formula:
Where A, B, C, D, E, F, G, H are responses to the following
questions, with values of 2 assigned to positive responses (Good, Increase, Positive effect), 1 assigned to middle values (Middling, Stay the same, No effect), and 0 assigned to negative values (Bad, Decrease, Negative effect).
A = Overall, would you describe current conditions for your business as good, middling or bad?
Good
Middling
Bad
B = In the next 12 months, do you expect your business’s revenue to increase, stay the same, or decrease?
Increase
Stay the same
Decrease
C = In the next 12 months, do you expect your business’s staff of full-time employees to increase, stay the same, or decrease?
Increase
Stay the same
Decrease
D = In the next 12 months, do you expect changes in government regulations to have a negative effect, no effect, or a positive effect on your business?
Negative effect
No effect
Positive effect
E = In the next 12 months, do you expect changes in tax policy to have a negative effect, no effect, or a positive effect on your business?
Negative effect
No effect
Positive effect
F = In the next 12 months, do you expect changes in trade policy to have a negative effect, no effect, or a positive effect on your business?
Negative effect
No effect
Positive effect
G = In the next 12 months, do you expect changes in technological innovation to have a negative effect, no effect, or a positive effect on your business?
Negative effect
No effect
Positive effect
H = In the next 12 months, do you expect changes in immigration policy to have a negative effect, no effect, or a positive effect on your business?
Negative effect
No effect
Positive effect
This quarter, less than 1% of respondents skipped one or more of the index questions A-H. In order to calculate an index, we impute these missing values by assigning them to the middle value for each question. These imputed values are only used for index calculation, not in any crosstabs or in the full banners.
