The U.S. Chamber of Commerce, in a critical report out Monday about the Obama economy, finds that out-of-control energy prices and over-regulation are choking job growth even though small businesses are feeling more confident about the economy.
The new small business survey found that business confidence in an improving economy has increased 7 percent since January, but hiring hasn’t followed. Some 49 percent of small businesses surveyed say they didn’t hire in the first quarter; 20 percent did staff up; and 30 percent lost employees.
In the survey, small business blamed high fuel prices and over-regulation for the stalling hiring. Some 52 percent cited regulations as the “top threat” to their businesses, a 9 percent jump since last year. And the perceived threat of gas prices on small businesses more than doubled, with 24 percent calling it a top concern. Some 78 percent believe the administration hasn’t done enough to curb fuel prices.
“We’re not out of the woods,” said Martin Regalia, chief economist at the Chamber.
Below are the key findings of the Chamber’s small business study:
The Small Business Outlook is Improving but Hasn’t Impacted Hiring Trends
- While small business confidence is increasing, with a 7% increase in the confidence of the economy since January, hiring has remained stagnant. Q1 saw a slight increase in the number of small businesses who have lost employees in the last year (30%). Nearly half of small business respondents (49%) have kept the same number of staff, and only 20% have hired in the last year.
- Concerns about over-regulation are the highest we’ve seen in the past year, with 42% of small businesses citing it as a major concern and 52% citing regulations as the top threat to their business, increasing 9 percentage points since last June.
- What do concerns about regulations and policies mean for small businesses? Stalled growth. 80% of small businesses surveyed report the taxation, regulation, and legislation from Washington make it harder for their business to hire more employees. Nearly three-out-of-four (73%) of small businesses surveyed cite the recent health care law as an obstacle to growing their business and hiring more employees.
The Small Business Outlook is Improving but Hasn’t Impacted Hiring Trends
- There are real concerns about rising energy prices—and no sense that the administration is doing much about it. The perceived threat of gas prices on small businesses has more than doubled, from 10% of respondents citing it as a top concern in January to 24% in March.
- Seventy eight percent think the Obama Administration has not done enough to keep prices low, increase domestic sources of energy, or support American job creation. In Congress, only 2% of Democrats are trusted to address domestic energy production.
Small Businesses Recognize the Link between Politics and Policy
- A vast majority (97%) of small businesses surveyed cite a candidate’s support for the free enterprise system as important, 84% cite as very important.
- Almost as many small businesses, (92%) think the business community should lead the American Recovery, compared to 8% who think the federal government has the best solutions.
- The vast majority of small businesses still are looking for the government to get out of the way (81%) and for more certainty opposed to government assistance.
- Small businesses see all bureaucrats in Washington as the problem but have sharpened their criticism of the Administration and Congressional Democrats in the past 9 months. Close to half of all respondents approve of the job the House Republican Majority is doing; only 8% approve of the Senate Democrat Majority. Sixteen percent of small businesses approve of the job President Obama is doing.
- 94% of small business members cite the Chamber’s voter education efforts as important; 70% say it is very important in educating the public on political issues.
