The first survey of small business CEOs since the U.S. Presidential election resulted in the greatest month-over-month increase in CEO Confidence since 2020, continuing an upward trend that began in advance of the first interest rate cut in September. The WSJ/Vistage Small Business CEO Confidence Index jumped to 109.5 in November, the highest level since August 2021. Looking at the historical data from the survey that began in June 2012:

• At a 36% year-over-year increase, this dramatic improvement in the Index is the highest in its history.
• Optimism about the future of the U.S. economy improved by 130% year-over-year, the largest gain in the survey’s history.
• The proposition of small business CEOs expecting increased revenues in the year ahead soared to 79%, up from an average of 61% at the beginning of the year.

One factor that influenced small business optimism in November includes the additional quarter-point interest rate cut by the Federal Reserve that followed the September rate cut of half a point. However, the most notable event was the election of a new Presidential administration. While there was a slight uptick in the Consumer Price Index in October as inflation hit 2.6%, and the Bureau of Labor Statistics reported a sharp decrease in jobs added in October, those headlines did not negatively impact sentiment among small businesses.

Connor Lokar, an economist with ITR Economics, shared with Vistage members in Cleveland, Ohio, that while inflation rates have come down, prices are still rising just less quickly. Inflation is forecasted to begin to rise in mid-2025, Lokar says, reaching close to 4% by the end of 2026. His advice to CEOs of small and midsize businesses is that whatever you need to buy in terms of inventory, whatever you are considering buying in terms of new investments, “make your move in the next 2-3 quarters.” Whether making end-of-year investments now or taking advantage of new budgets as the year begins, now is the time for small businesses to make investments in their business to lock in lower rates and wages.

Economic optimism among small businesses skyrockets

Looking ahead over the next 12 months, all components of the WSJ/Vistage Small Business CEO Confidence Index improved. Most notably, expectations for the future of the U.S. economy saw the highest increase; the proportion of small businesses that expect the economy to improve jumped 27 percentage points to reach 63% in November. Those who expect the economy to worsen in the year ahead held at 13%. Other than the post-pandemic gains seen in March-May of 2021, this is the highest proportion of small business optimism to pessimism since January 2017.

Business impacts expected from a new administration

While prior surveys revealed small businesses were not delaying business decisions based on election uncertainty, there is clearly a correlation in sentiment about the future. When asked about the effects of the incoming presidential administration, the small businesses ranked the following as top impacts:

1. Taxes and Tax Policies: Tax policies directly affect profitability, planning, and investment decisions. Among the concerns voiced were high corporate taxes, estate taxes, capital gains taxes, and uncertainties with the potential sunset of the 2017 Tax Cuts and Jobs Act (TCJA). Small businesses are hoping for lower taxes for reinvestment, employee benefits and business growth.
2. Trade and Tariffs: Tariffs influence pricing, margins, and global competitiveness.
   Small businesses’ concerns in this area include tariffs on imports (e.g., China, Mexico, Europe) significantly increasing costs of goods sold (COGS), disruption in supply chains and exacerbating inflation. They are optimistic about targeted, predictable trade policies over broad, indiscriminate tariffs.
3. Health Care Costs and Policies: Health-related policies directly affect retention, productivity and operational costs. Nearly 6-in-10 (59%) small businesses report that their health care costs will rise more than 10% in 2025. Rising health care costs and the potential repeal of the Affordable Care Act (ACA) are detrimental to both employee well-being and engagement as well as business finances.

Overall, small businesses hope for stability in tax, trade, and regulatory policies and opportunities to address the rising costs of health care and labor shortages. Balanced approaches to tariffs, immigration and environmental policies will support sustainable growth in the future.

November highlights

The November WSJ/Vistage Small Business CEO Confidence Index was calculated from an online survey sent to CEOs and other key leaders who are active Vistage members in the United States. The survey collected data from 498 respondents with annual revenues of $1-20 million and was open between November 7 and 18, 2024, to capture post-election sentiment.

• Current economy: The proportion of small businesses that believe the current economy is better than last year has increased to 28%, a 5-point increase in optimism from last month. While the same proportion (28%) report the economy has worsened, this marks a 20-point decline in pessimism in the past 4 months.
• Future economy: The proportion of small businesses who are optimistic about the future of the U.S. economy has nearly doubled, growing to 63% from 36%, while the percentage who expect the economy to worsen declined marginally to 13%.
• Revenue projections: Nearly 8-in-10 (79%) small businesses expect increased revenues over the year ahead, a 13-point jump from 66% last month. Only 4% of small businesses expect a decline in revenues.
• Profitability projections: 69% of small businesses expect increased profits in the next 12 months, compared to 53% in October. Just 7% of small businesses expect profits to decline over the next year, compared to 14% in October.
• Fixed investment plans: 45% of small businesses plan to increase fixed investments over the next 12 months, a 9-point increase from last month. Those that plan to reduce spending fell from 13% in October to 8% in November.
• Workforce expansion plans: Nearly two-thirds of small businesses (64%) plan to add personnel over the next 12 months, a 12-point increase from last month and the highest proportion in nearly 2 years.

To explore the full November 2024 WSJ/Vistage Small Business dataset, visit our data center or download the infographic.

Our December survey will take place December 2-16, 2024.