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Small Business Optimism Declines As Presidential Election Looms

NFIB Small Business Optimism Index August 2016: Presidential Election Has Small Businesses Uneasy of the Future

Small business owners are losing optimism and refusing to expand operations in the run up to November’s high-stakes presidential election.

According to researchers at the National Federation of Independent Business (NFIB), America’s Index of Small Business Optimism declined two-tenths of a point in August, settling at 94.4 points.


NFIB Small Business Optimism Index August 2016

An unprecedented 39 percent of business owners cited the nation’s unsteady political climate as a reason not to expand. Meanwhile, concerns surrounding government policy and economic uncertainty also hit record levels last month – pushing optimism levels well below the Index’s 42-year average of 98 points.

“The political climate used to be background noise in the economy.  It was always there, but small business owners focused more on general economic conditions,” NFIB President and CEO Juanita Duggan said in a statement.

“Based on this data, small business owners now blame the political climate for the declining economic conditions.  We haven’t seen numbers like these before, and it’s alarming.”

NFIB Small Business Optimism Index August 2016: Presidential Election Has Small Businesses Uneasy of the Future

This isn’t the first major study of 2016 to reveal a waning confidence in political leaders among small business owners.

A poll conducted by the National Small Business Association revealed in March that 40 percent of small business owners believe politicians don’t follow through on the promises they make. And in April, a survey compiled by OnDeck found that a whopping 34 percent had lost all confidence in the remaining presidential candidates.

Overall, four of the ten components used to generate the NFIB’s August Index posted noticeable declines. Five components posted a gain, while one remained unchanged.

Despite some gains, NFIB Chief Economist Bill Dunkelberg argued this most recent Index undeniably painted an ugly picture of America’s small business scene.

“Once again, the NFIB survey showed no signs of strength in the small business sector,” he said. “The current economic environment is not a good one for strong or sustained growth.”

In addition to short-term economic outlook, another issue businesses cited was their ability to track down qualified workers to fill open positions. According to August’s survey, 15 percent of small business owners told researchers that finding suitable candidates had become their biggest hurdle. By contrast, 30 percent said they had job openings they could not fill – which is the highest level on record since America officially entered the current period of economic recovery.

“There’s a very disturbing picture emerging in the economy,” Duggan said.

“A growing number of small business owners are paralyzed by the political climate. They’re especially reluctant to hire.  On the other hand, there’s another group of small business owners who want to hire, but can’t find qualified workers to fill positions.”

The Index of Small Business Optimism is part of the NFIB’s monthly Small Business Economic Trends survey. August’s survey was generated from the responses of 730 small businesses owners based across the country.

Trump, Clinton Photo via Shutterstock


Nash Riggins

Nash Riggins Nash Riggins is a Staff Writer for Small Business Trends and an American journalist based in central Scotland. Nash covers industry studies, emerging trends and general business developments. His writing background includes The Huffington Post, World Finance and GuruFocus. His website is NashRiggins.com.

2 Reactions

  1. I understand why they’re uneasy. Neither major-party candidate has a track record of helping SMBs. Trump takes advantage of every loophole there is and Hillary is determined to make businesses pay more taxes to fund government programs. It’s not pretty.

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