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For the past two years, small business optimism has seen a consistent uptick based on positive economic conditions and a general sense of expanding business opportunity.  While the current small business optimism report isn’t the first to see a slight decrease, the newest report comes on the eve of a new year which many believe will be the start of the first real slowdown under the Trump Administration.

To be clear, all President’s have increases and decreases to the economy during their Administration, but under the Trump Administration, much uncertainty is afoot.   Not all uncertainty is bad, as with the initial tariffs America saw a GDP growth of over 4% which the majority of economists did not predict.  The new economic trend for 2019 is once again difficult to predict.

In the latest CNBC|SurveyMonkey Small Business Survey, “after hitting a record high in Q3, the Small Business Confidence index declined from 62 to 59 in the fourth quarter.  The data supports other small declines in metrics, from the National Federation of Independent Business’s monthly read on small-business sentiment in September and October, as well as trends around hiring and labor from Bank of America and Wells Fargo.”

Sentiment around business conditions dropped from 58 percent in Q3 to 55 percent in Q4, marking the first decrease in six consecutive quarters.  Q4 is still up 11 percent year over year.  

Additional drops included small business owners supporting tax policy, down to 34 percent from 46 percent to start the year, and trade policy support, down to 16 percent.  According to CNBC, “1 in 5 business owners surveyed do business with China, and they were nearly twice as likely as others to expect a negative impact on their business.”

Todd McCracken, president of the National Small Business Association “referred to a poll conducted by the National Small Business Association with the Small Business Roundtable the day after the midterm elections: “We found that 40 percent said they are less optimistic about the outlook of the American economy. That could be driven by partisan allegiances, worry over economic predictions or just a general sense of ‘waiting for the other shoe to drop’ after a period of notable economic gains, but the fact remains — 40 percent are less optimistic, and that has real-world implications for growth,” he said.”

The CNBC/SurveyMonkey Small Business Survey was conducted from Nov. 19–29, polled more than 2,100 small-business owners.