Headlines:
- Small business confidence tumbles to another new low of 42/100, as inflation dominates concerns
- 77% expect inflation to continue to rise, and just 26% have confidence in the Federal Reserve’s ability to control inflation
- Majority say the recession has already arrived, describe the economy as “poor”
- Biden’s approval slips yet again, falling to the lowest point of his presidency
Small business confidence tumbles to a new low as inflation dominates business owners’ concerns
- 43% of small business owners say inflation is the biggest risk to their business right now, up from 38% last quarter and a new high-water mark over the past year
- Fewer small business owners now than in the previous three quarters (9%) say COVID-19 is the biggest risk to their business
- 20% continue to say supply chain issues are their biggest risk, nearly unchanged from last quarter (19%)
- 77% expect inflation to continue to rise; just 22% say inflation has reached a peak
- Confidence in the Federal Reserve’s handling of inflation remains low: just 26% of small business owners say they are confident in the Fed’s ability to control inflation, with a mere 7% who are “very confident”
- Our composite small business confidence index tumbles to another new low, a score of 42/100, down from a score of 46 last quarter. The previous low was a score of 43 during the first quarter of the Biden Administration.
- Nearly every index component worsened quarter-over-quarter:
- Just 33% of small business owners now say current conditions for their business are good, down from 36% in Q2
- 28% expect their revenue to decrease over the next 12 months, up from 21% last quarter
- 18% expect the size of their staff to decrease over the next 12 months, up from 14% last quarter
- 58% expect changes in government regulations to have a negative effect on their business in the next 12 months, up from 55% last quarter
- 62% expect changes in tax policy to have a negative effect on their business in the next 12 months, up from 59% last quarter
- 74% of small business owners expect higher interest rates to have a negative impact on their business over the next six months
Majority say the recession has already arrived, describe the economy as “poor”
- Most small business owners (57%) say “we’re already in a recession,” and another 14% expect the US economy to go into a recession before the end of the year
- This exceeds the pessimism among the general population, 45% of whom say “we’re already in a recession”
- Just over half (51%) of small business owners describe the current state of the economy as “poor,” up from 44% last quarter
- People in the general public who do not own small businesses share this sentiment: 52% describe the state of the economy as “poor”
- On all things related to the economy, sentiment among Republicans is worse than it is among Democrats, both in the general population and among small business owners
- 69% of Republicans who own small businesses say we’re currently in a recession, compared with 34% among Democrats who own small businesses
- 68% of Republicans who own small businesses describe the current state of the economy as “poor,” compared with 19% among Democrats who own small businesses
- 89% of Republicans who own small businesses expect inflation to continue to rise, compared with 51% among Democrats who own small businesses
Hiring still a problem but not the top priority
- 28% of small business owners say they have open roles they haven’t been able to fill for at least three months, unchanged from the previous three quarters
- Just 7% say it is easier to hire now than it was a year ago, while 50% say it has gotten harder and 20% say it’s about the same. Those stats are steady from last quarter, and have held relatively stable since Q3 2021.
- 45% say their business is currently experiencing a rising cost in wages, fewer than the number who report experiencing supply chain disruptions (55%) or rising costs of supplies (76%). Each of those stats have held steady for the previous three quarters.
Biden’s approval slips yet again
- 31% of small business owners approve of the job Joe Biden is doing as president, another tick down from last quarter’s 32%, and his lowest approval yet.
- 81% of small business owners who are Democrats approve of the job Biden is doing as president, while just 9% of those who are Republicans and 29% of those who are independents approve
Cybersecurity still not perceived as a threat
- Just 4% of small business owners report cybersecurity as the biggest risk to their business now, down 1 percentage point from last quarter
- Only 4 in 10 (39%) are concerned their business will be the victim of a cyber attack within the next 12 months, a statistic that has held steady quarter-over-quarter since Q3 2021
- Nevertheless, 65% of small business owners are confident in the ability to respond to a cyber attack; up slightly from 62% last quarter
Biden continues to tread water, but neither he nor the Federal Reserve have gained the confidence of Main Street since Q1
- Just 26% of small business owners are confident in the Federal Reserve’s ability to control inflation, while 73% are not confident–both numbers virtually unchanged from last quarter
- 12% of Republicans, 25% of independents, and 55% of Democrats are very or somewhat confident in the Federal Reserve’s ability to control inflation
- 74% of small business owners expect the coming interest rate hikes to have a negative impact on their business over the next six months
- Among those who approve of the job Biden is doing as president, 63% express confidence in the Fed; among those who do not approve of Biden, just 8% express confidence in the Fed
- Biden’s approval rating falls to a new low, with about a third of small business owners approving of his handling of the presidency and two-thirds disapproving
- This quarter, 31% approve, 67% disapprove
- Among small business owners who are Democrats, 81% approve of the job Biden is doing as president, and 19% disapprove
- Among small business owners who are Republicans, 9% approve of the job Biden is doing as president, and 90% disapprove
- Among small business owners who are independents, 29% approve of the job Biden is doing as president, and 65% disapprove
Do you own a small business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Yes 100%100%100%100%No 0%0%0%0%No answer 0%0%0%0%Question wording: Do you own a small business?Survey dates: –In addition to yourself, how many employees work at your small business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 0 - 4 61%57%66%70%5 - 9 16%16%16%13%10 - 19 10%11%7%4%20 - 49 6%7%5%4%50 - 99 2%3%2%4%100 - 499 3%4%2%1%500 or more 1%1%0%3%No answer 1%0%2%0%Question wording: In addition to yourself, how many employees work at your small business?Survey dates: –Is your business a:
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Sole proprietorship 34%32%37%43%Partnership 7%7%7%4%Limited Liability Company (LLC) 31%33%30%19%C Corporation 7%8%6%6%S Corporation 17%18%15%13%B Corporation 0%0%0%0%Nonprofit 3%2%5%12%No answer 1%0%1%3%Question wording: Is your business a:Survey dates: –Overall, would you describe current conditions for your business as good, middling or bad?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Good 33%34%33%20%Middling 48%46%50%50%Bad 19%20%17%26%No answer 1%0%1%4%Question wording: Overall, would you describe current conditions for your business as good, middling or bad?Survey dates: –In the next 12 months, do you expect your business’s revenue to increase, stay the same, or decrease?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Increase 37%36%39%32%Stay the same 34%33%36%34%Decrease 28%31%24%30%No answer 1%0%1%4%Question wording: In the next 12 months, do you expect your business’s revenue to increase, stay the same, or decrease?Survey dates: –In the next 12 months, do you expect your business’s staff of full-time employees to increase, stay the same, or decrease?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Increase 20%21%19%13%Stay the same 60%58%64%50%Decrease 18%20%16%33%No answer 1%1%2%4%Question wording: In the next 12 months, do you expect your business’s staff of full-time employees to increase, stay the same, or decrease?Survey dates: –In the next 12 months, do you expect changes in government regulations to have a negative effect, no effect, or a positive effect on your business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Negative effect 58%63%51%50%No effect 33%29%39%35%Positive effect 7%6%9%11%No answer 2%1%2%4%Question wording: In the next 12 months, do you expect changes in government regulations to have a negative effect, no effect, or a positive effect on your business?Survey dates: –In the next 12 months, do you expect changes in tax policy to have a negative effect, no effect, or a positive effect on your business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Negative effect 62%67%55%51%No effect 28%24%35%30%Positive effect 8%8%9%15%No answer 1%1%2%4%Question wording: In the next 12 months, do you expect changes in tax policy to have a negative effect, no effect, or a positive effect on your business?Survey dates: –In the next 12 months, do you expect changes in trade policy to have a negative effect, no effect, or a positive effect on your business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Negative effect 46%48%41%46%No effect 45%43%47%41%Positive effect 9%8%10%11%No answer 1%1%1%2%Question wording: In the next 12 months, do you expect changes in trade policy to have a negative effect, no effect, or a positive effect on your business?Survey dates: –In the next 12 months, do you expect changes in technological innovation to have a negative effect, no effect, or a positive effect on your business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Negative effect 16%15%18%19%No effect 55%55%54%49%Positive effect 28%29%27%24%No answer 1%1%1%7%Question wording: In the next 12 months, do you expect changes in technological innovation to have a negative effect, no effect, or a positive effect on your business?Survey dates: –In the next 12 months, do you expect changes in immigration policy to have a negative effect, no effect, or a positive effect on your business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Negative effect 36%40%30%33%No effect 56%52%60%56%Positive effect 7%6%8%9%No answer 1%1%2%2%Question wording: In the next 12 months, do you expect changes in immigration policy to have a negative effect, no effect, or a positive effect on your business?Survey dates: –Under the current conditions, how long can your business continue operating?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Less than a week 3%3%3%12%Less than a month 2%1%4%0%A few months or less 7%6%8%12%Less than a year 16%15%16%35%More than a year 71%73%68%38%No answer 2%2%2%2%Question wording: Under the current conditions, how long can your business continue operating?Survey dates: –Do you think now is a good time or a bad time for businesses to raise prices?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Good 13%14%10%19%Mixed 55%54%56%50%Bad 31%30%33%31%No answer 1%1%1%0%Question wording: Do you think now is a good time or a bad time for businesses to raise prices?Survey dates: –How much of an impact do you expect higher interest rates to have on your business over the next 6 months?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 NET negative impact 74%77%69%62%Major negative impact 38%41%33%47%Minor negative impact 36%37%36%15%NET positive impact 9%7%11%27%Minor positive impact 5%5%5%2%Major positive impact 4%2%6%26%No impact 16%15%19%11%No answer 1%1%1%0%Question wording: How much of an impact do you expect higher interest rates to have on your business over the next 6 months?Survey dates: –Do you have any positions that have been open for at least 3 months that you have been unable to fill?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Yes 28%30%26%26%No 70%68%72%72%No answer 2%2%2%2%Question wording: Do you have any positions that have been open for at least 3 months that you have been unable to fill?Survey dates: –Compared to a year ago, would you say it’s gotten easier or harder to find qualified people to hire?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Easier 7%5%9%17%Harder 50%53%46%35%About the same 20%22%18%36%Not applicable 22%19%26%10%No answer 1%1%1%2%Question wording: Compared to a year ago, would you say it’s gotten easier or harder to find qualified people to hire?Survey dates: –Is your business currently experiencing any of the following? (Select all that apply)
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Rising costs of supplies 76%77%76%59%Supply chain disruptions 55%60%48%36%Rising costs of wages 45%52%35%50%None of the above 13%11%15%7%No answer 2%2%1%4%Question wording: Is your business currently experiencing any of the following? (Select all that apply)Survey dates: –Which of the following best describes how the company is dealing with the rising costs of supplies?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 1,838 1,128 673 37 Absorbing rising costs without raising prices 25%25%24%19%Raising prices because of higher input costs 40%42%36%36%Planning to raise prices if costs continue to increase 35%33%40%45%No answer 0%0%0%0%Question wording: Which of the following best describes how the company is dealing with the rising costs of supplies?Survey dates: –How would you rate the current state of the economy?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Excellent 5%6%4%3%Good 14%14%15%16%Fair 28%30%26%29%Poor 51%50%54%52%No answer 1%1%1%0%Question wording: How would you rate the current state of the economy?Survey dates: –How confident are you in the Federal Reserve’s ability to control inflation?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 NET confident 26%26%25%22%Very confident 7%8%7%4%Somewhat confident 18%18%18%18%NET not confident 73%73%73%78%Not so confident 31%28%37%36%Not confident at all 42%45%37%42%No answer 1%1%2%0%Question wording: How confident are you in the Federal Reserve’s ability to control inflation?Survey dates: –Which comes closer to your view on inflation, even if neither is exactly right:
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Inflation has reached a peak 22%23%21%18%Inflation will continue to rise 77%76%78%82%No answer 1%1%1%0%Question wording: Which comes closer to your view on inflation, even if neither is exactly right:Survey dates: –How soon do you expect the United States economy to go into a recession?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 We’re already in a recession 57%57%56%73%Q4 2022 14%16%12%4%First half of 2023 14%12%17%8%Second half of 2023 5%5%5%1%In 2024 or later 7%7%7%10%No answer 3%3%3%6%Question wording: How soon do you expect the United States economy to go into a recession?Survey dates: –Which of the following is the biggest risk to your business right now?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 Inflation 43%42%44%39%Supply chain disruptions 20%23%16%11%Labor shortage 11%11%12%1%COVID-19 9%7%11%29%Cybersecurity 4%5%3%5%Other (please specify) 11%11%11%11%No answer 2%1%3%4%Question wording: Which of the following is the biggest risk to your business right now?Survey dates: –How concerned are you that your business will be the victim of a cyber attack within the next 12 months?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 NET concerned 39%38%40%56%Very concerned 13%12%13%8%Somewhat concerned 27%26%26%48%NET not concerned 59%60%58%38%Not so concerned 36%36%36%22%Not concerned at all 24%24%22%16%No answer 2%2%2%6%Question wording: How concerned are you that your business will be the victim of a cyber attack within the next 12 months?Survey dates: –How confident are you in your ability to quickly resolve a cyber attack on your business?
Gender Answer Total Male Female Not listed/non-conforming Unweighted N 2,557 1,527 976 54 NET confident 65%66%64%72%Very confident 23%26%20%13%Somewhat confident 42%40%44%59%NET not concerned 33%32%34%21%Not so confident 22%22%24%5%Not confident at all 10%10%10%16%No answer 2%2%3%6%Question wording: How confident are you in your ability to quickly resolve a cyber attack on your business?Survey dates: –
