In May of 2011, the U.S. Chamber of Commerce released the results of its inaugural quarterly Small Business Outlook Survey. The quarterly surveys are designed to track the small business community’s outlook on their business, the local economy, and the national economy over time. Small business owners are polled nation-wide, and respondents include U.S. Chamber members and non-members. Click here to see the Q1, Q2 and Q3 2011 survey results.

Quarter 4
Small Business Outlook Survey - January 2012


Key Findings
I. Uncertainty Continues to be the Biggest Challenge for Small Businesses 

• The small business outlook for the national economy still shows that the vast majority think our country is off on the wrong track (85%).
• Of small businesses polled, 52% perceive their top issue and biggest challenge as the general economic climate. Half of all small businesses surveyed are not sure if America’s best days are ahead or behind, and the threat of over-regulation continues to cause concern.

• What is the impact of regulation and the new health care law?  Fewer jobs.  78% of small businesses surveyed report the taxation, regulation and legislation from Washington make it harder for their business to hire more employees.  And, 74% say the recent health care law makes it harder for their business to hire more employees. 

• What do small business leaders want Washington to do? Eight out of ten say they would rather have Washington stay out of the way than provide a helping hand. Eight-six percent say they would rather have more certainty from Washington than more assistance (6%) to deal with the economy.

II. Small Businesses Recognize the Importance of Politics in Policies that Impact their Business

• The vast majority of small business members surveyed (93%) find the Chamber’s work in educating the public on political issues and candidates valuable.
• Nearly all small businesses polled (98%) consider a candidate’s position on free enterprise and business issues as important to how they vote. Eighty-four percent of small businesses cite support for free enterprise as very important.

• Fewer small businesses plan to lose employees over the next year (11%). However, there was no increase seen in employers planning to hire in 2012, with 63% planning to keep the same number of employees in the next year.  
• Small business attitudes about the local economy have improved over the last year, up 12 percentage points. Thirty-four percent of small businesses surveyed think the business climate will improve over the next two years, but have yet to resume hiring.

Analysis 
Economic environment improving, but uncertainty remains

The outlook on the national economy has not improved since our last study in October; only 10% say the U.S. economy is headed in the right direction. However, this quarter’s data shows a significant increase in the percentage who believe their local economy is headed in the right track (up from 33% to 45%). And, small business owners still hold a fairly bright outlook for their own businesses, with 69% saying they believe their business is heading in the right direction. 

As businesses look forward, attitudes about the future are also beginning to brighten. Thirty-four percent say the climate for small businesses like theirs is likely to improve over the next two years. This is a significant improvement from October, when only 23% said the environment was improving.  

However, challenges still exist. More than half of all small business owners polled cite economic uncertainty as one of their top challenges. This finding has been consistent over the course of the study.

The Hiring Outlook

Though there are seeds that point to a more positive economic outlook, they have yet to sow large scale hiring plans for small businesses. Only 19% of small business owners say their business has added employees over the last year (virtually unchanged since July), and an additional 63% say they will keep the same number of employees over the next year.

Why aren’t they hiring? As one would expect, 52% say economic uncertainty is among the top reasons they are not hiring. Additionally roughly one-third cites lack of sales as part of their hesitation. Many say Washington is part of the problem, as well. Thirty-six percent say uncertainty about what Washington will do next is one of the top two reasons they are not hiring and 30% say they are not hiring because of the requirements in the health care bill. 


 
What lies ahead?  

Uncertainty about the future: 50% say they are not sure if America’s best days are ahead of us or behind us –a significant increase over last quarter. Only 23% say our country’s best days are ahead of us and 27% say the best days are behind for America. 

However, they are much more positive about their own business. Forty percent say their business’ best days are ahead, and 40% say they are unsure. Only 20% say their business’ best days are behind them.