Wells Fargo survey: Presidential candidates not addressing small business concerns
Taxes, the economy, and healthcare are focal points of presidential election for small business owners, according to Wells Fargo/Gallup Small Business Index.
SAN FRANCISCO, May 4, 2016 – A majority of small business owners say the issues most important to them are not being addressed in the presidential campaign, and business owner optimism remains in a holding pattern, according to the latest Wells Fargo/Gallup Small Business Index, conducted April 4-8.
The quarterly survey, which measures the optimism of small business owners, jumped last quarter after posting declines for three consecutive quarters. In the latest results, the overall Index score saw a slight decline – from 67 in January to 64 in April, the same level as one year ago. Small business owners' estimates of cash flow, which had improved last quarter, have now settled back to levels typical of the last two quarters of 2015. The other measures that make up the overall Index score – which include financial situation, company revenue, capital spending, hiring and ease of obtaining credit – had minor changes in the second quarter survey compared with first quarter results.
"During this presidential election year, the latest Wells Fargo/Gallup Small Business Index shows the outlook of business owners has not changed significantly in the last year, both in their current situation and future outlook," said Lisa Stevens, Wells Fargo's head of small business. "While small business optimism over the past year has been higher than at any point since 2008, many business owners remain cautious about today's economy and the year ahead."
Small business owners were also asked about the 2016 presidential election campaign in the April Wells Fargo/Gallup Small Business Index. The survey found that small business owners are significantly engaged in news about the presidential campaign. A total of 87 percent of business owners are following the election either very closely (56 percent) or somewhat closely (31 percent). This is a much higher percentage than the average American, according to Gallup. In a national survey of adults in mid-April, Gallup found that only 37 percent of Americans were following the election very closely and 38 percent somewhat closely. Ninety-two percent of small business owners said they do plan to vote in the November election.
While half of business owners (50 percent) said the outcome of the November presidential election will have a major impact on their small businesses, there appears to be significant doubt among small business owners that the candidates are addressing their concerns. Less than three in 10 small business owners surveyed (28 percent) said the presidential candidates are discussing the issues most important to them as small business owners. Notably, this is much lower than the 58 percent of national adults surveyed by Gallup in mid-April who said that the candidates are addressing issues most important to them. Less than half (47 percent) of business owners surveyed said they understand the candidates' issues extremely or very well.
Issues important to small business owners
In a sequence of questions, small business owners rated the importance of 15 specific issues to their small business when the new president takes office. Small business owners said that the new president's actions relating to these top issues were extremely or very important to them:
Small business implications of the tax code, tax regulations and tax rates, 83 percent
Economic policies that affect small business owners, 77 percent
Healthcare and the current healthcare law, 73 percent
Other issues that were rated as extremely or very important by two-thirds or more of business owners included, actions that would increase consumer confidence and terrorism/national security. Among issues at the low end of the importance ranking for small business owners were climate change, minimum wage, and education.
Small Business Owner Challenges
When business owners were asked to identify the most important challenge facing their business, 16 percent cited attracting customers and finding new business as the top concern. Other top concerns included the economy (10 percent), government regulations (10 percent) and hiring and retaining quality staff (9 percent). These challenges have been consistently reported as top concerns of small business owners since early 2013, although the order of concerns shifts from quarter to quarter.
Small Business Index Key Drivers
Wells Fargo and Gallup survey small business owners across the nation each quarter to gauge their perceptions of their present situation (past 12 months) and future expectations (next 12 months) in six key areas: financial situation, cash flow, revenues, capital spending allocation, hiring, and credit availability.
Wells Fargo/Gallup Small Business Index Scores: Q2 2015 – Q2 2016
|Overall Index Score||Present Situation||Future Expectations|
|Q2 2016 (surveyed April 2016)||64||24||40|
|Q1 2016 (surveyed January 2016)||67||26||41|
|Q4 2015 (surveyed November 2015)||54||21||33|
|Q3 2015 (surveyed July 2015)||59||23||36|
|Q2 2015 (surveyed April 2015)||64||24||40|
Since August 2003, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on current and future perceptions of their business financial situation. The Index consists of two dimensions: 1) Owners' ratings of the current situation of their businesses and, 2) Owners' ratings of how they expect their businesses to perform over the next 12 months. Results are based on telephone interviews with 600 small business owners, with annual revenues up to $20 million, in all 50 United States conducted April 4-8, 2016. The overall Small Business Index is computed using a formula that scores and sums the answers to 12 questions — six about the present situation and six about the future. An Index score of zero indicates that small business owners, as a group, are neutral – neither optimistic nor pessimistic – about their companies' situations. The overall Index can range from -400 (the most negative score possible) to +400 (the most positive score possible), but in practice spans a much more limited range. The margin of sampling error is +/- four percentage points. The highest Index reading was +114 in the fourth quarter of 2006, and the lowest reading was -28 in the third quarter of 2010.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.8 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through 8,800 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 269,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune's 2015 rankings of America's largest corporations. Wells Fargo's vision is to satisfy our customers' financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.
Wells Fargo serves approximately 3 million small business owners across the United States and loans more money to America's small businesses than any other bank (2002-2014 CRA government data). To help more small businesses achieve financial success, in 2014 Wells Fargo introduced Wells Fargo Works for Small Business® – a broad initiative to deliver resources, guidance and services for business owners – and a goal to extend $100 billion in new lending to small businesses by 2018. For more information about Wells Fargo Works for Small Business, visit: WellsFargoWorks.com. Follow us on Twitter @WellsFargoWorks.
For more than 70 years, Gallup has been a recognized leader in the measurement and analysis of people's attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world's largest corporations and institutions.