Election Season Has SMEs Stressed, Says Research

The United States is vast, with market fluctuations across state lines. Union Bank decided to examine the state of small businesses in the country but with a focus on the West Coast.

On Thursday (Feb. 25), Union Bank released the results of that analysis. According to researchers, the Small Business Economic Survey found that SMEs in the region are more pessimistic about the nation’s economy in 2016 than they were in 2015.

The majority of small business owners (58 percent) said the nation’s economy is moving in the wrong direction — 18 percent more than the number of SMEs that said the same for last year’s survey.

More than a third (37 percent) said the climate for small businesses is on the decline, and 11 percent fewer SME owners than last year said the small business climate has improved.

Still, the findings weren’t all negative. According to Union Bank, 90 percent of SMEs felt optimistic about their own businesses.

Separate research from the CAN Capital and PYMNTS.com Store Front Business Index seem to support that optimism; the latest findings revealed that small businesses in the U.S. are growing faster than the national GDP.

Researchers pointed to the impending presidential election as one possible explanation for this drop in positive outlook among small business owners. According to Union Bank, during the 2012 election year, the survey found similar evidence of uneasiness and uncertainty about the nation’s economy. At the same time, like in 2016, business owners felt confident in their own companies.

Other political factors are weighing on small business owners’ minds, too.

For instance, half of business owners told Union Bank that they know they are unprepared — or that they aren’t sure if they’re prepared — if interest rates change again.

“The feelings of uncertainty about the national economy reflected in the survey results are somewhat consistent with what we’re seeing among small business owners who are encouraged about the future of their business and cautiously expanding and increasing staffing,” said Union Bank Managing Director and Head of Business Banking Todd Hollander in a statement.

“Our clients are working smarter to sustain their businesses, and many continue to seek capital, but they are closely monitoring interest rates and are concerned about the interest rate changes and other government implications during this election year,” the executive added.