World Economy

Majority of small business owners think a recession is coming: Survey


Wall Street surveys also are revealing elevated recessionary fears. The CNBC Fed Survey conducted in January, which includes economists, fund managers and strategists, placed the probability of a recession in the next 12 months at 26 percent, the third straight increase and the highest since January 2016, and the highest of the Trump presidency. A recent Wall Street Journal survey of economists finds fears of a recession at a seven-year high.

A nationwide survey of more than 10,000 Americans conducted by SurveyMonkey in January also found a high level of recession anxiety, with 63 percent of Americans saying a recession was likely in the next year and only 10 percent saying it was “very unlikely.” The SurveyMonkey consumer confidence index also hit its lowest point since December 2017.

The Federal Reserve’s recent decision to reconsider and possibly slow planned increases in interest rates, as well as sales from its bond portfolio, which were seen as pressuring the market, are another sign that the economic growth story may quickly have become more fragile than previously anticipated. However, with everyone from small-business owners and individual Americans to central bankers and Wall Street economists worried about a recession, there also is a risk that we “talk” ourselves into a recession, according to former Pimco CEO and now Allianz chief economic advisor Mohamed El-Erian.

“I’m stunned by all this talk of recession,” El-Erian told CNBC in late December. “For us to get into a recession, the rest of the world has got to really slow down dramatically. We’ve got to be careful, because we can talk ourselves into a recession. And that’s how bad technicals become bad economics.”

He noted that the labor market is strong, wages are going up, business investment is increasing and so is government spending.

Small-business-owner sentiment does vary significantly based on gender and political affiliation. The CNBC/SurveyMonkey data shows that women are much more likely to think a recession is on the way (61 percent vs. 49 percent of men). Recession fears also break down along party lines, with 38 percent of Republicans saying a recession is likely, versus 79 percent of Democrats and 59 percent of survey respondents that identify as independents.

“Small-business owners, like everyone else, tend to see the world through partisan lenses. Republicans who own small businesses, like all Republicans, are relatively dismissive about the prospects of a nearing recession. Democrats, whether they own a small business or not, are more fearful about the chances a significant downturn will hit in 2019,” said Laura Wronski, senior research scientist at SurveyMonkey.

The CNBC/SurveyMonkey Small Business Survey is conducted quarterly using SurveyMonkey‘s online platform and based on its survey methodology.



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