Introduction to Small Business Confidence
The economic reality on Main Street has often been at odds with the mood on Wall Street, but recent data suggests that small business owners are now matching the market with increased confidence after a rocky start to 2025. According to the quarterly CNBC|SurveyMonkey Small Business Survey, nearly half of small business owners (46%) now describe the economy as “excellent” or “good”, up from 30% in Q2.
Improved Sentiment Across Party Lines
The improved sentiment extends across party lines, with 24% of small business owners who are Democrats describing the economy as good or excellent, up from 8% in Q2. There was a similar increase among Republican small business owners, with 67% having a positive view of the economy, 15 points higher than in the previous quarter. The CNBC|SurveyMonkey Small Business Confidence Index moved up to 56, from 51 the previous quarter.
Confidence in Business Conditions
By most basic measures of business confidence, the numbers are up: 44% describe current business conditions as good, up from 36% the previous quarter. Over half (51%) of small businesses expect sales to increase in the next 12 months, up from 41% in Q2. Twenty-eight percent say they will increase headcount in the next 12 months, up from 22% in Q2. However, an increasing percentage of small business owners, especially among the Gen Z and millennial generations, are making more use of AI and quickly finding a positive impact on business, and expect less hiring over time as a result.
Economic Fears and Concerns
Economic fears have not gone away entirely. In fact, concerns about recession and tariffs remain high among the majority of small business owners. But they are going down. Those who think the country is headed for a recession now stand at 61%, down from 70% in Q2. Fewer small business owners say they have been affected by tariffs or will be in the future, down from 66% in Q2 to 59% now. Less small business owners now cite tariffs as their biggest risk, down from 17% in Q2 to 10% this quarter.
Government Policy and Regulations
Views on government policy are also trending in a positive direction: last quarter, 44% of business owners expected government regulations in the next 12 months to have a negative impact on their business. That’s now down to 36%. Views of trade policy have also improved, with 40% of business owners saying it will have a negative impact over the next year, down from 51% who held this view last quarter. And as President Trump passed his signature tax and spending bill, the percentage of small business owners who said tax policy over the next year would be a negative declined from 37% to 32%.
Conclusion and Next Steps
Even as the numbers among small business owners improve, support for tariff policy remains sharply divided along partisan lines. Eighty-one percent of Republican respondents support Trump’s tariffs policy, while 87% of Democrats oppose it. For more information on the current state of small business confidence and the impact of government policies, readers can visit Here
Smart Tip for Readers
To stay ahead of the curve, small business owners should regularly assess their business conditions, sales expectations, and hiring plans to adapt to changing economic conditions and make informed decisions about investments in technology like AI. By doing so, they can better navigate the complexities of the current economy and make the most of emerging opportunities.
