Welcome to our SurveyMonkey | CNBC small business confidence survey. Every quarter, we ask small business owners about the current small business environment and their expectations for the future.
A solid majority of small business owners (58 percent) say current conditions for their businesses are good, the highest level yet in six quarters of the CNBC|SurveyMonkey Small Business Confidence Survey. That’s one of the core components of the small business index, and rising optimism on this score is the main reason the index has ticked higher to 62, tying its all-time high.
Some 33 percent of small business owners expect to hire additional full-time workers this year, seven percentage points higher than a year ago, and also a new high mark. Part of the hiring expectations stems from struggles small businesses have had filling open positions: 16 percent of small business owners say they have open positions that they have been unable to fill for at least three months. The shortfall, but also the high hiring needs, shoots up dramatically by size of firm.
Percent of small business owners who say current conditions are “good”
This CNBC/SurveyMonkey online poll was conducted July 27 - August 5, 2018 among a national sample of 2,085 self-identified small business owners ages 18 and up. This quarter, we also reached 9,565 individuals who do not own small businesses. 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 3.5 percentage points for the results among small business owners and 1.5 percentage points for results among those who do not own small businesses.
Data for small business statistics have been weighted according to business characteristics (industry and number of employees) according to the Small Business Administration’s 2013 Statistics of U.S. Businesses. Additionally, person-level data (age, gender, level of education, race, geography) for business owners have been weighted to the Census Bureau’s 2012 Survey of Business Owners.
What is the small business confidence index? Every quarter, we asked small business owners a battery of eight questions relating to current business conditions and future expectations. Those questions are:
Positive responses are assigned a score of 2, middle responses are assigned a score of 1, and negative responses are assigned a score of 0. For each individual small business owner, an index score is calculated by summing the values for each question, dividing by 8, and multiplying by 50. This yields a possible index range of 0 to 100.
For the first time since the start of our SurveyMonkey|CNBC small business index a year ago, more than half (53 percent) of small business owners now say that current conditions for their businesses are good. That percentage has been steadily climbing every quarter, starting at 38 percent in Q2 of 2017. Just six percent of small business owners say that current conditions are bad (down from 11 percent a year ago) and 41 percent say conditions are middling (down from 51 percent).
Despite this increase in optimism, our small business confidence index value—a score calculated from responses to 8 survey questions, including the above question on current conditions—showed no substantial change, dipping from 62 in Q1 to 61 in Q2 of 2018, a difference within the margin of error for quarter-to-quarter change.
Overall small business confidence jumped across the board from an index value of 57 in the fourth quarter of 2017 to a value of 62 in the first quarter of 2018, a five-point swing that is the largest quarter-to-quarter movement the index has seen to date. The shift was driven by increased optimism for tax policy: half (50 percent) of small business owners expect to see tax cuts in 2018. Those who expect tax cuts score nearly 20 points higher on the index than those who don’t see one ahead (71 vs. 52).
In Q4 2017, small business owners were split evenly on a core index question about the effect that tax policy would have on their business, but no longer. Opinions have shifted significantly, and twice as many now expect changes in tax policy to have a positive rather than a negative effect on their businesses (46 to 23 percent).