A majority of America’s small businesses rank the economy as one of the top two issues influencing who they will vote for this fall according to data from the Q3 2020 MetLife & U.S. Chamber of Commerce Small Business Index (Index). The survey of 1,000 small business owners—conducted between August 21 and 27 of this year—also indicates that they continue to view the economy as predominately negative.
Most (78%) small business owners categorized the economy as “average,” “somewhat poor,” or “very poor” in August. That marks an eight-point increase from July and a significant (40 point) shift since January 2020, when 38% said the same, indicating a marked increase in negative sentiment toward the national economy. In addition, over half (57%) of small business owners rank the economy as the first or second most important issue influencing who they will vote for in the presidential election.
“The pandemic has had an uneven economic impact on industries and workers, many of whom are small business owners. It’s no wonder their driving issue for the upcoming election is the economy,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce. “We are now in a K-shaped recovery, where many small businesses face severe long-term challenges. We need our elected leaders to come together and provide targeted relief to the industries and small businesses who have been the most deeply impacted. Inaction is simply unacceptable.”
After the economy, small business owners cite taxes (27%), COVID-19 (25%), and healthcare (25%) as the most important 2020 election issues.
Heightened Interest in 2020 Election, Support for Bipartisanship
The majority (62%) of small business owners are more interested in the 2020 election (including 40% who are “much” more interested) compared to 2016. Meanwhile, just 11% say they are less interested in this presidential election compared to the previous one.
When it comes to political positions, 81% of small business owners report that the impact of a candidate’s policies on their small business play a role in deciding which candidate to support. Nearly half (48%) say it plays a major factor in their decision.
Also, the majority (68%) of small business owners agree that it is more important for political leaders to compromise than stick to their beliefs in order to get things done. Overwhelmingly, small business owners (82%) believe partisan gridlock in the federal government is a serious problem.
Bipartisanship and the ability to pass legislation is especially important at a time when small businesses are watching policymakers in Washington as they consider potential additional coronavirus relief legislation.
“Any discussion of rebuilding the health of the U.S. economy needs to start with the small businesses which make up 99% of our economy and have been the hardest hit over the past six months of the global pandemic,” said Amy Fazackerley, founder and CEO of Lay-n-Go. “The PPP loans seem to have run their course, but the virus has not gone away and small businesses are closing every day. The government needs to step up and help by bolstering the economy with generous interest terms and lengthy payback timelines so small businesses are able to rebuild and get back on their feet.”
Business Health Dependent on Sector
While most small business owners categorize the economy as “average” or “poor,” perceptions vary depending on which sector your business belongs to. Just over one in three retailers feels their small business is in good health, down nearly 20 percentage points from March. In contrast, small businesses in the service industry are significantly more optimistic about their cash flow and overall business health (58% say their health is good) compared to July (40% said health was good). Meanwhile, professional services like consulting, remain the most likely sector to report good health (62%, compared to 37% for retail, 47% for manufacturing).
“We are doing very well and have gained several new clients with long-term commitments (especially in the area of Diversity and Inclusion). Since locally we are in Phase III, there will be more face-to-face engagements with social and/or physical distancing,” said Ronnie Slone, president of the Slone Group. “The required pivot to virtual caused us to be more innovative and tap into our creative juices. We are a better firm for it.”
The current Small Business Index score is 50.3 (an increase from 39.5 in Q2). However, this is still substantially below pre-pandemic levels: the Index score was 71.7 in Q1 of 2020, based on data collected before the full economic impact of the coronavirus set in.
The Index is part of a multiyear collaboration by MetLife and the U.S. Chamber to elevate the voice of America’s small business owners and highlight the important role they play in the nation’s economy. To learn more about the methodology: https://www.uschamber.com/sbindex/methodology/