U.S. Chamber Releases Q1 Small Business Survey

Finds Washington Policies Continue to Hamper Hiring and Growth

WASHINGTON, D.C.—The U.S. Chamber of Commerce’s latest quarterly small business survey finds that Washington policies continue to hamper hiring and growth, with over a quarter of small businesses saying they have lost employees in the last year. The survey, conducted online by Harris Interactive in March 2013 among more than 1,300 small business executives, shows that 79% of small businesses believe the economy is off on the wrong track and requirements of the health care law are now the biggest concern, topping economic uncertainty for the first time in two years. 31% plan to cut back hours to reduce the number of full time employees to avoid triggering the employer mandate.

Small business owners voiced support for policies that will promote economic growth and remove government barriers, including lowering taxes, increasing domestic energy production, and tackling immigration reform. Two-thirds of respondents said that immigration reform would increase America’s global competitiveness and help strengthen our economy.

“While the general trends of the economy appear to be improving, a closer look shows workforce participation still falling and full time employment still historically low,” said Dr. Martin Regalia, the Chamber’s chief economist. “In today’s economy, we need policies that will breed confidence and encourage small businesses to expand, not cut back staff and employees’ hours. With the right policies in place, small business owners’ optimism and confidence in the economy will improve.”

Small businesses see a number of opportunities for growth on the horizon and are now looking for Congress to lead on policies like increased energy production and comprehensive tax reform.

“It’s no surprise that 86% of small businesses disapprove of the job the Senate Democrats are doing on the economy,” said Rob Engstrom, the Chamber’s national political director and senior vice president. “Senate Democrats have refused to pass legislation that will help create jobs or grow the economy. Instead of approving the Keystone XL Pipeline or reining in harmful regulations, the Senate has passed a budget that will raise taxes by over $1 trillion, after four years of not passing one at all.”

Among the key findings:

• 79% of small businesses still think the American economy is off on the wrong track, and 27% lost employees in the last year.
• 87% of small business owners are looking for more certainty compared to 5% looking for assistance.
• 86% of small businesses disapprove of the job the Senate Democrat majority is doing, compared to 46% who disapprove of the House Republican majority.
• Two-thirds (66%) agree that immigration reform will help strengthen the U.S. economy and increase America’s global competitiveness.
• 78% of small businesses surveyed view the debt and deficit as a threat to the success of their business.

Energy

• 77% of small businesses see higher energy prices as an immediate threat to their business, and 80% do not believe the Administration is doing enough to keep gas prices low, increase domestic energy sources, or develop an energy policy that supports American jobs. 

Tax Reform/Regulations

• Eight out of ten small businesses (79%) support comprehensive tax reform and over half (52%) indicated that the tax code should be made less complex.
• 84% say that regulations, restrictions, and taxes negatively impact their ability to do business.
• 76% of small businesses surveyed are organized as pass-through entities, which pay taxes on business income at the individual tax rate.

Health Care

• Requirements of the health care law are now the biggest concern for small businesses, having bumped economic uncertainty from the top spot which it has held for the last two years.
• 77% say the health care law will make coverage for their employees more expensive, and 71% say the law makes it harder for them to hire more employees.
• 32% of small businesses plan to reduce hiring as a result of the employer mandate, and 31% will cut back hours to reduce the number of full time employees.

Methodology

The Q1 U.S. Chamber of Commerce Small Business Outlook Survey was conducted online between March 14 – 26 by Harris Interactive among 1,332 Small Business Executives (defined as executive level position in a company with fewer than 500 employees and annual revenue less than $25 M).

The full survey results are available here: http://www.uschambersmallbusinessnation.com/community/q1-2013-small-business-survey

These findings reinforce the key components of the Chamber’s 2013 American Jobs and Growth Agenda, an ambitious plan to generate stronger economic growth, create jobs, and expand opportunity for all Americans.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.