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- Business optimism has increased since the election of Donald Trump in November, and business leaders have expressed a marked turnaround in sentiment.
- The NFIB survey of small business sentiment hit its highest level since 2018, supporting other data showing that business owners are feeling good about the outlook.
- While consumer surveys have also shown some improvement in sentiment since the election, they have not shown the same optimism.
While consumers are expressing a range of sentiments about the economic outlook, one category of people is feeling renewed optimism about the direction of the economy: business leaders.
In several polls since the November election of Donald Trump, business owners and executives have shown a marked shift in sentiment. Perhaps nowhere is this shift more evident than with the National Federation of Independent Business (NFIB) Small Business Optimism Index, which rose to its highest level since October 2018 in December.
This followed the results of the November survey – the first since the election – in which the number of small business owners who were optimistic about the economy increased by 41 points.
“Optimism on Main Street continues to grow with the improved economic outlook following the election,” NFIB Chief Economist Bill Dunkelberg wrote in the report. “Expectations for economic growth, lower inflation and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year.”
And much of that optimism is directly tied to Trump’s campaign promises, analysts said.
“Small business owners anticipate lower regulatory costs and more transparent policy direction, particularly regarding energy policy and tax treatment,” wrote Adrian Helfert, Westwood’s chief investment officer.
Other surveys show increases in sentiment among business owners
It’s not the only survey showing growing optimism among businesses.
In JPMorgan Chase’s annual survey of business leaders, 65% expressed optimism in the national economy, more than double last year’s responses. Only 14% of respondents see a recession coming in 2025, a sharp drop from the 40% who predicted an economic downturn last year.
Additionally, a study by the US Chamber of Commerce showed that 72% of small business owners said they expect revenue to increase in 2025.
“Recession worries have eased as businesses, consumers and markets have handled a period of rising inflation and interest rates better than expected. Confidence in the soft landing scenario has increased and business leaders are facing a positive mindset,” Ginger Chambless, head of research at JPMorganChase Commercial Banking, said in a prepared statement.
Businesses need strength in consumer confidence
Business leaders stand in contrast to consumers, who have shown more measured views of the economic outlook.
For example, the Michigan Consumer Sentiment survey showed that consumer expectations in January were almost seven points lower than at the same point last year. And the Conference Board’s Consumer Confidence Index was lower in December after rising higher after the November election.
While small business optimism offers encouraging signs, Helfert wrote that consumers will also need to remain positive about the economy for businesses to see growth this year.
“Looking forward, the sustainability of this upbeat trend may depend on whether consumer sentiment, particularly among lower-wage groups, follows suit,” Helfert said.
