Post-Election Surge: Small Business Confidence Rises in 2024

The recent CNBC|SurveyMonkey Small Business Survey for Q4 2024 highlights a significant rise in optimism among small business owners, driven largely by a boost in optimism within Republican ranks. This increase comes in the wake of the latest election results, offering insights into small business owners’ perspectives on key issues like inflation, trade policy, and regulation.

Key Findings of the Q4 2024 Survey

The survey paints a picture of growing confidence among small business owners in the United States, seeing a notable increase from Q3. The small business confidence index climbed to 62 out of 100, an 11-point rise from the previous quarter. This uptrend highlights a positive shift, primarily fueled by the burgeoning optimism among business owners who lean Republican.

• Republican Optimism: A striking 28-point increase in optimism among Republican business owners from the previous quarter underscores a dramatic shift in sentiment.
• Democratic Outlook: In stark contrast, business sentiment among Democrat business owners decreased from 62 to 50. However, the positive outlook among Republicans was sufficient to balance out this decline.
• Independents: There was a smaller but noteworthy increase in optimism from independent business owners, rising from 51 to 57.

Political Landscape and Trade Policy Concerns

While overall sentiment has improved, the survey reveals lingering concerns about potential trade disruptions and tariffs, especially those proposed by President-elect Trump. These concerns are splitting opinions down party lines:

• Approximately 54% of businesses expressed little to no concern about potential tariff impacts, in contrast to 46% who reported they were “very or somewhat concerned.”
• Republican Business Owners: 76% of Republicans showed minimal anxiety over the proposed tariffs.
• Democrat Business Owners: Conversely, 78% of Democrats expressed significant worries over trade policy shifts.

Interestingly, only 23% of business owners are taking proactive measures in anticipation of new tariffs.

Inflation Trends and Federal Reserve Trust

The survey also sheds light on small business owners’ perceptions of inflation and their trust in the Federal Reserve:

• Forty percent believe inflation has peaked, a jump from 33% last quarter.
• Confidence in the Federal Reserve’s ability to manage inflation has grown, with 45% being “very or somewhat confident.”

These insights mark a shift from partisan to more unified views on inflation, though significant divides remain regarding the Federal Reserve’s effectiveness.

Implications for the Future

As the economic landscape begins to shift with new leadership, the question arises whether this burgeoning optimism will sustain. The survey suggests small business owners are cautiously optimistic for the future, but it remains to be seen how impending economic policies will affect them in the long run.

Concluding Thoughts

The Q4 2024 CNBC|SurveyMonkey Small Business Survey indicates a pivotal moment for small business confidence in the U.S., driven largely by political affiliations and economic outlooks. With Republican optimism at its highest in recent years and continuing concerns about trade and inflation, the landscape is set for further evolution as new policies take shape next year. The survey serves as a barometer for the sentiment on Main Street and a signal of potential economic directions and challenges to be addressed.

With the new year approaching, small businesses keenly await how the upcoming administration’s policies will impact their operations and profitability, maintaining a vigilant eye on market developments and economic indicators.

Source: https://www.cnbc.com/2024/11/29/trump-election-confidence-surges-small-business-owners.html