Small businesses in US paralysed by political uncertainty

US election uncertainty paralysed decision-making by small US businesses, the results of a widely-followed survey showed.

The National Federation of Independent Businesses's gauge of confidence among small business owners edged higher by 0.8 percentage points in October from the month before to reach 94.9.

Economists had forecast a reading of 94.5.

“The data contained in this report shows record levels of uncertainty among small business owners, and it is tied directly to the election,” NFIB President Juanita Duggan said in a statement.

“The result is economic inertia, with business owners unwilling to make the business decisions that would jumpstart the economy.”

To an extent, the results appeared to chime with other anecdotal evidence such as that received by Morgan Stanley from conversations with clients, for example.

"With the VIX near 20, Morgan Stanley’s Global Risk Demand Index now registering outright ‘fear’, and our client conversations indicating that the election has put investment decisions on hold, markets are clearly fretting about the election," the bank's strategists said in a research note sent to clients on 6 November.

Duggan said that the political climate was the second most frequently cited reason among owners who said now was a bad time to expand.

Nearly half of NFIB survey respondents cited taxes or regulations and red tape as the "single most important business problem", Duggan added.