Survey: Uncertainty, gas prices slowing hiring by small business

Optimism about the economy is growing, but don't look for proof in the labor market, according to a new survey of small businesses.

Growing confidence in the economy is not leading to an influx of new hiring, as businesses fret about uncertainty driven in large part by Washington and growing fuel costs, according to a new survey by the U.S. Chamber of Commerce.

“This survey confirms that slow gains in economic growth are being undermined by uncertainty over rising gas prices, an onslaught of pending regulations, and stalled pro-growth bills in Congress,” said Dr. Martin Regalia, the business lobby's chief economist.

Businesses with fewer than 500 employees are more confident about the economy than they were in January, but only 22 percent are bringing on more employees. Instead, 64 percent plan to stand pat at current staffing levels, while just 8 percent are expecting to trim workers in the coming months.

When asked what is holding them back, uncertainty was the most common explanation. Fifty-two percent of those surveyed said they were not hiring because they weren’t confident in the recovery, with another 33 percent pointed to uncertainty driven by Washington.

The implementation of President Obama’s healthcare law and the requirements it might impose was tied for the third most common reason businesses were not hiring, along with a general lack of sales. Seventy-three percent of the business surveyed said the healthcare law is an obstacle to hiring new workers.

Another 20 percent blamed excessive regulation for slowing down hiring.

House Small Business Committee Chairman Sam Graves (R-Mo.) called the survey a Washington wake-up call.

"If this doesn't get the President's attention, I don't know what will," he said in a statement. "I hear from small businesses every week about the burdens that are preventing them from growing and hiring. Last month’s poor unemployment report, coupled with surveys like this, should serve as yet another reminder to Washington that we still have work to do to help provide an environment for a strong recovery."

He also used the survey to tout House Republican efforts to push a small business tax cut set for consideration. The measure, which would offer a 20 percent tax cut to businesses with less than 500 employees, is set for a floor vote Thursday, and Graves called on Democrats and the White House to support it.

Democrats have previously criticized the bill, saying it would provide an unneeded tax break to companies like hedge funds and lobbyists.

Businesses are becoming increasingly concerned about the impact of high gas prices. Twenty-four percent of those surveyed said high gas costs was their top concern, up from 10 percent in January.

The price of gasoline has spiked in recent months and is now hovering near $4 per gallon.

When it comes to dealing with growing pain at the pump by tapping domestic resources, the small business community is most confident in congressional Republicans, as 65 percent said they trust GOP lawmakers to address domestic energy production.

And 78 percent of those surveyed agreed that the White House has not done enough to keep gas prices low, compared to 10 percent who believe it has done everything it can in terms of energy policy.

The Chamber conducted the survey at the end of March and beginning of April, polling 1,339 small-business executives.

This post updated at 3:15 pm.

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