Donald Trump and Hillary Clinton are making small business owners cautious, historically cautious.
In the most recent NFIB Small Business survey, 39% of small business owners cited the political climate as a reason they are not planning to expand their business. This is the highest level ever recorded in the survey going back to its start in 1994, according to Bank of America Merrill Lynch US economist Michelle Meyer.
It’s not just small businesses that are feeling this way. Even Wendy’s CEO Todd Penegor made the case that the fast food chain’s sales were down in part because of caution on the part of consumers ahead of the upcoming election.
Meyer also noted that the political uncertainty is showing up in other measures of the economy as well. In the note, Meyer said that there were seven mentions of the election in the most recent Federal Reserve Beige Book on economic conditions. To the BAML economist’s point, the seven mentions don’t sound particularly encouraging.
One mention in the Beige Book discusses the impact on construction.
“Contacts in several Districts cited only modest expectations for sales and construction activity moving forward, due in part to economic uncertainty surrounding the November elections,” said the release.
Even the Dallas Fed mentioned the uncertainty was weighing on retail sales.
“Contacts were more uncertain in their outlooks this reporting period, mainly because of the presidential election and its impact on consumers and consumer confidence,” said the Dallas Fed.
Meyer also said that the presidential election is hurting other economic releases as well.
“We remain concerned about how uncertainty around the election spills into the real economy, particularly given the weakness in the September Empire and Philly Fed indices, the sharp declines in the August ISM manufacturing and non-manufacturing indices and slip in U of Michigan consumer sentiment,” wrote Meyer.
As the election gets closer and closer, it appears to be making business owners more and more nervous.
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