Small business confidence took a hit in the first quarter of the year, according to the MetLife & U.S. Chamber of Commerce Small Business Index, but confidence is still strong.
The score fell from 69.3 in Q4 of 2018 to 65.6 this quarter. Much of the fall came from attitudes towards national and local economies. This quarter, optimism about the U.S. economy fell five points to 53%. Optimism about local economies fell slightly less, also to 53%.
Nevertheless, this still means nearly 66% of small business owners have a positive outlook on their companies and the economic environment.
The survey of small business owners took place during the recent partial government shutdown, which may have affected the findings.
While economic optimism took a dip, future investment and hiring plans remain nearly stable.
Twenty-seven percent of small business owners plan to increase investment in the next year, and 29% plan to hire more workers. Both percentages are slightly down from Q4 of 2018.
The Index, this quarter, focused on infrastructure issues. Like most Americans, small businesses rely on infrastructure to get work done and have concerns with the quality of the roads.
Sixty-two percent rated local roads and bridges as average, poor, or very poor quality. U.S. highways didn’t rate much better. Fifty-two percent had the same opinion of them.
"We’ve got 70 vehicles, they’re moving around throughout the day. If our workers are sitting in traffic, that’s lost productivity. I’m going to pay them, but I can’t bill for them," said James Strange, vice president of Advanced Electrical Systems in Louisville, KY. "We need our people, our equipment, our tools on the job site. It’s important to be able to move across the city quickly.”
The Index also noted how much small business owners consider communications technologies to be critical infrastructure pieces.
Eighty-five percent of those surveyed said high-speed internet is important or very important to their success. That’s a higher percentage than those who said the same about local roads and bridges.
“Small business owners across the country count on our vital infrastructure systems to move people, products, and information,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce. “The Index results add to a mountain of evidence that America’s infrastructure isn’t meeting the demands of today’s business owners and today’s economy. This should be a wake-up call to leaders in Washington: It’s time to invest in modernizing our nation’s infrastructure.”
U.S. Chamber President and CEO Tom Donohue took that message to Capitol Hill. “The Chamber believes the time has come to enact a federal infrastructure modernization plan,” he told lawmakers.
He reiterated the four pillars of the U.S. Chamber’s infrastructure modernization plan and urged action this year.
“Our long-term competitiveness and lasting prosperity require us to bring our infrastructure system into the 21st century. And the businesses that the U.S. Chamber represents are depending on it,” said Donohue.