Recession mania is receding on Main Street
- Fewer small business owners now than last quarter (49% vs. 57%) say “we’re already in a recession”
- Yet, more small business owners now than in Q3 (24% vs. 14%) expect a recession to occur during the first half of 2023; just 9% of small business owners expect a recession to occur before the end of the year; 9% expect a recession in the second half of 2023, and 6% expect a recession in 2024 or later
- This sentiment shifts considerably among Republican small businesses owners: 58% now say “we’re already in a recession”, down 11 points from last quarter (69%)
- Republican small business owners are nearly twice as likely as Democrats who own small businesses to say “we’re already in a recession” (58% vs. 31%)
- Small business owners are more likely than the general public to say “we’re already in a recession” (49% vs. 38%)
- Most (61%) small business owners say their business is prepared to withstand a recession if one were to occur.
- Across all industries, business types, and business sizes, at least half of small business owners say their business is prepared to withstand a recession should one occur
- More Democrats than Republicans are confident their business is “very prepared” to withstand a recession (20% vs. 12%)
- More small business owners are confident that their business is prepared to withstand a recession (61%) while just 52% of the general public feel prepared to handle a recession should one occur
- Despite this confidence, 49% of small business owners rate the economy as poor, roughly unchanged from last quarter (51%)
Inflation is top of mind – more so now than ever before
- More small business owners now (45%) say inflation is the biggest risk to their business right now, up two points from last quarter (43%) and a new record high compared with the previous four quarters.
- Yet, economic concerns remain heavily partisan: 51% of Republican small business owners say inflation is the biggest risk to their business right now vs. just 35% of small business owners who are Democrats.
- Overall, nearly all small business owners are concerned about inflation (92%) – and a sweeping majority are “very concerned” (69%).
- Concern is equally high among the general population too: 92% are concerned about inflation; 68% are “very concerned”
- But, the majority of small business owners don’t expect a reprieve any time soon: 78% expect inflation to continue to rise, unchanged from last quarter (77%).
- Small businesses grapple with labor shortages:
- 14% of small business owners say labor shortages are the biggest risk to their business right now – a record high over the past year
- Staffing concerns are especially prominent for larger small businesses: 36% of small businesses with 50 or more employees say labor shortages are the biggest risk to their business right now, far outpacing the issue of inflation (27%)
- A record-low 7% of small business owners say COVID-19 is the biggest risk to their business right now, down from 9% last quarter
- 17% say supply chain issues are their biggest risk, down five points from this time last year (23%)
Main street wants incoming Congress to prioritize inflation more than anything else
- 43% of small business owners say the top priority for the next Congress should be “controlling inflation”.
- 56% of Republican small Business owners say the top priority for the next Congress should be “controlling inflation” compared with just 21% of small business owners who are Democrats and 42% of small business owners who are independents
- Democrats who are small business owners are split across all issues: 21% say inflation should be the top priority, followed closely by reproductive rights (18%), gun policy (12%), voting rights (12%), corporate tax reform (9%), personal income tax reform (7%) and immigration reform (4%)
- But overall, aside from inflation and immigration reform, all other issues rank in the single digits
- Among the general public, the sentiment is the same: 41% say the next Congress should prioritize controlling inflation
- Half of small business owners (49%) don't expect changes to the new Congress to have an effect on their business; the rest are split on whether the new Congress will have a positive (25%) or negative impact (24%) on their business.
- Republican small business owners are more hopeful: 33% expect the new Congress to have a positive effect on their business, nearly double the number of small business owners who are Democrats (17%)
Biden’s approval rating on Main Street ticks up – the first time since taking office
- After steadily declining quarter-over-quarter for the first two years of his presidency, Biden's approval took a slight upward turn this quarter--another sign of his political strength after the midterm elections.
- This quarter, 34% of small business owners approve; 65% disapprove – the highest approval rating seen this year
- Among small business owners, Biden’s approval rating ticks up slightly among Democrats and independents (83% of Democrats and 31% of independents approve of Biden this quarter compared with 81% of Democrats and 29% of independents last quarter)
- Among general public: 45% approve of Biden, up slightly from last quarter (41%), but still down sharply from the all-time high approval rating set in the first quarter of Biden’s presidency (59%)
- Biden’s approval rating still remains heavily partisan:
- Just 8% of small business owners who are Republican approve of President Biden compared with 83% of small business owners who are Democrats and 31% of small business owners who are independents
- Confidence in the Fed increases slightly too: 28% of small business owners are confident in the Federal Reserve’s ability to control inflation, up slightly from 26% last quarter.
- 16% of Republican small business owners are confident in the Fed now, up from 12% last quarter
- This sentiment holds for the general public as well: 32% now are confident in the Fed’s ability to control inflation, up slightly from 29% last quarter
No change in the perceived threat of cybersecurity
- Just 37% of small business owners are concerned that their business will be the victim of a cyber attack in the next 12 months, roughly consistent with the past three quarters
- Still, a majority of small business owners (64%) are confident in their ability to quickly resolve a cyber attack on their business, on par with last quarter (65%)
- 4% of small business owners say cybersecurity is the biggest risk to their business right now, unchanged from last quarter (4%)
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