Uncertainty about the approaching presidential election is leading small business owners to take a wait-and-see approach to the economy and their companies, a survey published Tuesday shows.
Bank of America Corp. polled 1,000 business owners and found that their expectations for economic growth fell by nearly half from a survey taken last fall. Just under 30% expect the national economy to improve over the next year, down from 56% with that view in a survey last fall, AP reported.
Many owners said the election is a reason why they’re less optimistic. Almost 55% said the election is affecting their outlook. Last fall, just over a third cited the election as a factor. The latest survey was taken between mid-March and mid-April, as the primary election campaign was reaching its mid-way point.
The drop in optimism was also reflected in owners’ expectations for their revenue. Just over half forecast that their revenue would rise in the next 12 months. That’s down from nearly three-quarters who said last fall they expected their revenue to increase.
The Bank of America survey was in line with one released Monday by Capital One in which 41% of the 401 businesses surveyed described current business conditions as excellent or good, but that was down from 50% last year.
With optimism sagging, owners are scaling back hiring plans. Some 22% said they’ll bring on new staffers over the next year, down from two-thirds in the fall. The number of owners who cited the economy as a reason for not hiring rose to 28% from 20%. But 70% said they just don’t need to hire—their current staffs can handle the work.
Owners may be just cautious, rather than pessimistic, said Bank of America Small Business Executive Robb Hilson, who cited the election as a key reason why owners are reluctant to hire.
“They’re not saying they’re not hiring. They’re saying, let’s see how this plays out,” he said.
The number of owners interested in loans has also fallen—14% said they’d applied for a loan in the last two years, down from 44%. Approval rates for those who did apply fell to 89% from 97%. And just 9% said they planned to apply for a loan this year, down from the 35% last fall.
