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
