The measure of small business owners’ confidence in the US economy fell this quarter to 60 from a reading of 62.1 in the fourth quarter, according to the US Chamber of Commerce’s Small Business Index released this week. Fifty-four percent of small businesses cited inflation as a top challenge.
“This quarter, small businesses’ concerns over inflation are soaring and their view of the broader economy is darkening, though they still report that their businesses are in good health,” said Tom Sullivan, VP of small business policy at the US Chamber of Commerce. “Small business owners are pulling back a bit on spending as they see storm clouds in the economy appearing ahead.”
The percentage of small business owners who believe the economy is in good health fell to 20% in this quarter from 27% reported in the fourth quarter. In addition, fewer small businesses, 38%, said they plan to increase investment over the next year, down from 47% in the previous quarter.
However, despite small business owners seeing a weak economy, a majority (63%) said their business is in good health, and 64% are comfortable with their cash flow. Seven in 10 said they have retained the same number of employees over the past year, and 19% report increasing staff over the same period, according to the report.
The survey is part of a multiyear collaboration by MetLife and the US Chamber of Commerce. The quarterly index is an online survey of approximately 750 small business owners and decision-makers. It was conducted between Jan. 16 and Feb. 2.