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Despite challenges, major poll showing confidence among small businesses

Despite a big jump in concern for inflation, small-business owners are feeling good about the health of their businesses and expectations for the future, leading to a new pandemic-era high score of 64.1 for the MetLife and U.S. Chamber of Commerce Small Business Index.

About three in five (61 percent) small-business owners say their business is in good health. Upward trends over the last several quarters to hire more, invest more, and anticipate increasing revenues continued, according to the poll taken Jan. 14-26, 2022, and released today.

But at the same time, concern for inflation soared. The vast majority (85 percent) of small-business owners are concerned about the impact of inflation, and 44 percent indicate they are very concerned, jumping 14 percentage points from 31 percent last quarter. More than two in three businesses (67 percent) report having to raise prices to cope with inflation.

“It is encouraging to see the steady rise in business confidence on Main Street, even as this latest survey was taken at the height of the Omicron wave,” said U.S. Chamber Vice President of Small Business Policy Tom Sullivan. “Inflation is top-of-mind for small businesses as it continues to limit their purchasing power, forcing small businesses to raise their prices and absorb higher costs within already thin margins. The Administration and Congress need to focus on easing the burden on small businesses by reducing inflationary pressures and addressing the worker shortage crisis to ensure continued recovery on Main Street.”

One in three (33 percent) small-business owners now rank inflation as their biggest challenge, up from 23 percent last quarter. Other top challenges include:

  • Supply chain disruptions (26 percent), jumping eight percentage points since last quarter
  • COVID-19 safety protocols/compliance (24 percent)
  • Revenue (21 percent)
  • Employee well-being/morale (14 percent)

Small Business Are Making Changes to Improve Employee Retention

The worker shortage and The Great Resignation are causing major headaches for small business owners. Most small businesses (56 percent) are concerned about recruiting enough new employees to fill open positions, and 57 percent are concerned about employee retention. Larger small businesses (20-499 employees) rank employee retention (21 percent) alongside inflation (24 percent), supply chain disruptions (25 percent), and COVID-19 (26 percent) as one of their highest concerns.

However, a majority (60 percent) of small businesses say they have implemented new changes over the past year to improve employee retention. These changes include:

  • increasing schedule flexibility (37 percent),
  • increasing wages (31 percent), and
  • providing employees with more opportunities to learn/grow (29 percent).

“While employee retention remains a concern for the majority of small business owners, it is a positive sign to see these employers taking steps to attract and retain talent,” said Cynthia Smith, senior vice president, Regional Business at MetLife. “This adds to small business owners’ confidence in winning the war for talent and is reflected in their growing optimism and pandemic-era high index score.”

About the Small Business Index

The MetLife and U.S. Chamber of Commerce Small Business Index is part of a multiyear collaboration by MetLife and the U.S. Chamber to elevate the voice of America’s small-business owners and highlight the important role they play in the nation’s economy. The quarterly Index, an online survey of 750 small business owners and decision makers, is designed to take the temperature of the sector, see where small business owners are confident, and where they are experiencing challenges.

On March 3, 2022, the Q1 2022 Small Business Index quarterly spotlight section on inflation was released early as a Special Report on Inflation and Supply Chain Shocks on Small Business. Find more small business special reports here.

From April – July 2020, MetLife and the U.S. Chamber produced a monthly coronavirus report, the Small Business Coronavirus Impact Poll. For more small-business resources, visit uschamber.com/co.

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