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Nearly four out of five (79 percent) small-business owners express concern over the effectiveness of U.S. government leaders, according to a Bank of America survey of 1,000 small-business owners across the country.
In addition, 67 percent say the presidential election will affect their business either a lot or somewhat, while 53 percent believe the outcome of congressional elections will have an impact.
In terms of hiring, just 22 percent of small-business owners plan to add employees over the next 12 months, according to the report—a 24 percentage-point drop from last year.
The majority (59 percent) plan to keep the same number of employees over the next 12 months, perhaps suggesting small-business owners are waiting until after the election to reassess hiring plans.
However, the number of business owners who plan to lay off employees has decreased from spring 2015.When asked what issues are most important to them in the upcoming elections, business owners cite taxes and healthcare policy as well as the economy and job growth.
Confidence that the national economy will improve has fallen 19 percentage points over the last year, to 29 percent in spring 2016 from 48 percent in spring 2015, while confidence in small-business owners’ local economies is down 11 percentage points, to 38 percent in spring 2016 from 49 percent in spring 2015.
Nearly four-fifths (79 percent) of small-business owners expressed concern that the effectiveness of U.S. government leaders will impact their business over the next 12 months, the report found.
Nearly three-quarters (74 percent) of small-business owners are concerned healthcare costs will impact their business, while 52 percent worry the U.S. and/or global stock market will have an impact.
Conversely, anxiety around other economic factors has declined since spring 2015, with concern levels decreasing on consumer spending, interest rates and the strength of the U.S. dollar, according to the report.
In addition, the survey indicated there was also a downward shift in concern around commodities prices and credit availability.
Small-business owners are neither aggressively planning for growth nor downsizing, taking a wait-and-see approach during the election year.
They are less bullish on revenue growth and expansion plans, with only half (51 percent) expecting their revenue to grow over the next 12 months, according to the report—a decrease of 12 percentage points since spring of last year.
Forty percent say they expect their revenue to remain flat over the next 12 months, compared with 31 percent in spring 2015.
Small-business owners who plan to apply for a loan in 2016 plan to use the funds to invest in new equipment, expand operations and hire more employees.
A year ago, 38 percent of small-business owners cited investment in employee training and development as their top reason to seek funding. This year, only 5 percent of small-business owners cited training and development as their reasons to apply for a loan.