Big support for the relief package
President Joe Biden’s first big policy proposal meets with widespread support among small business owners and the general public alike. An easy majority of small business owners (63%) say they support the proposed $1.9 trillion relief bill, which would provide additional support to individuals and businesses impacted by the pandemic. Even among small business owners who are Republicans, nearly half (46%) support the huge stimulus package; six in 10 (60%) small business owners who consider themselves independents and virtually all small business owners who are Democrats (96%) support the proposal.
That same policy gets even more outsize support among the general public, 77% of whom say they support Biden’s proposal, including fully 50% who “strongly” support it. Nearly all Democrats and Democratic leaners (97%), an overwhelming majority of independents (79%), and more than half of Republicans and GOP leaners (54%) support the proposal.
The appetite for an unprecedented stimulus package comes as Main Street eyes a bleak start to 2021, reporting worsening business conditions, reduced expectations around hiring and revenue, and negative expectations for policy changes to come in the Biden administration.
Just 29% of small business owners describe current business conditions as good, down from 39% last quarter and from 56% one year ago. A full quarter (25%) say current business conditions are bad, up from 18% last quarter and from 7% last year.
The CNBC|SurveyMonkey Small Business Confidence Index score sank to its lowest level yet: 43 out of a possible 100, falling further below last quarter’s previous low score of 48.
Every measure included in the index took a negative turn this quarter, with many wiping out the stutter-step gains they had made in the past two quarters as Main Street began to recover from its coronavirus-related crash.
The number of small business owners who say they expect their revenue to increase in the next 12 months is down to 41% from 45% last quarter, while the number who expect their revenue to decrease rose from 23% to 27%.
Similarly, more small business owners this quarter than last quarter (20% vs. 15%) expect their headcount to contract in the next 12 months, while fewer (19% vs. 23%) expect it to expand.
Policy changes anticipated with the Biden administration
Some of the biggest quarter-over-quarter changes are reflected in changing policy expectations, which coincide with the start of Joe Biden’s presidency. For the first time in the four years of the survey, a majority of small business owners (56%) expect changes in government regulations to have a negative effect on their business in the next 12 months, which is more than double the number from one year ago (26%). Just 16% say they expect changes in government regulations to have a positive effect on their business within the next year.
Similarly, 61% of small business owners expect changes in tax policy to have a negative effect on their business in the next 12 months, up from 53% last quarter and from 28% a year ago. Just 12% expect changes in tax policy to have a positive effect on their business.
More than four in 10 (42%) now say they expect changes in trade policy to have a negative effect on their business in the next year, and nearly that many (36%) expect changes in immigration policy to have a negative effect. Both of those numbers are more than twice as high as they were in the first quarter of 2020.
More small business owners are Republicans than are Democrats, and this immediate drop in small business confidence with the transition from the Trump administration to the Biden administration reflects this overwhelming partisanship.
In the fourth quarter of last year, 60% of small business owners said they approved of the way Donald Trump was handling his job as president, with 93% of small business owners who identified as Republicans saying they approved and just 22% of small business owners who identified as Democrats said the same.
Biden begins his presidency with an approval rating that is underwater among small business owners (43% approve, 54% disapprove), but his partisan split is the mirror image of Trump’s. Among small business owners who are Democrats, 95% approve of the Joe Biden is doing; among those who are Republicans, 14% approve.
Sustained damage from the pandemic
While the presidential transition puts a spotlight on the various ways that small business owners will have to adapt to a new administration’s policies, the coronavirus pandemic continues to take a toll on the overall economy, especially on small businesses.
Two in 10 small business owners say their business shut down temporarily as a result of the pandemic and have since reopened at limited capacity, more than twice the number (9%) who say they’ve shut down and since reopened at full capacity. In addition, 10% of small business owners say they’ve shut down and have yet to reopen, and another 4% say they’ve shut down, reopened, and then shut down again. Just more than half of small business owners (54%) say they have remained open throughout the pandemic.
Perceptions of long-term prospects are dimming, as well. Just over half of small business owners now say they can survive for more than a year under current business conditions, down from 67% who said so last quarter. Some 21% say they can only last a few months or less, up from 15% last quarter.
Read more about our polling methodology here.
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