Small Business Outlook: Economy, inflation, impact

Summary: October was a tough sales month for small business.  Capital spending is trending upward and expectations rose for a post-election sales bump.  

• -20% of small business owners reported higher sales in the past 3-months (3 points lower than September and lowest reading in 4-years) and the percentage expecting higher sales rose 5 points to reach -4% (highest level this year).
• 35% of small businesses reported job openings they could not fill (up 1 point from September).
• 31% of small business owners raised compensation in October (down 1 point from September and lowest level in 3-years).
• 23% of small business owners ranked inflation as their top concern (unchanged from September and still the top cited problem) and 20% said that labor quality is their top concern (3 points higher than September).
• 21% of small businesses raised their prices in August (1 point lower than September) and 26% are planning on raising prices in the next 3-months (1 point higher than September).
• 54% of small business owners reported capital outlays in the last 6-months (up 3 points from September) and 22% are planning capital purchases in the next 3-months (up 3 points from September). 
• -6% of small business owners expect better credit conditions in the next 3-months (2 points better than September).
• 6% of small business owners believe now is a good time to expand (2 points higher than September).
• 64% of small business owners are not interested in a loan (2 points higher than September) and 25% report borrowing on a regular basis (down 1 point from September).
• 3% of small business owners reported that financing was their top problem in October (down 1 point from September).

Fiserv Small Business Index (November 2, 2024)

Summary: Small business sales bumped up in October.

• Month-over-month sales at small businesses in October rose 3.7% from a flat September and year-over-year sales at small businesses rose 7.1% compared to October 2023.
• Fastest growing retail categories year over year were General Merchandise (11.4% growth), Food & Beverage (8.4% growth), and Furniture (7.8% growth).
• Food Services and Restaurants experienced a 2% increase compared to September and 5.9% increase compared to October 2023. Caveat – average ticket sizes declined 1.7% compared to a year ago.
• Service-based small businesses grew 4% since September and grew 7.4% compared to October 2023.

SBE Council’s Small Business Check Up Survey (October 30, 2024)

Summary: Small employers are positive about the economy and worried about inflation.

• Even though small business owners have a favorable view of the economy, 81% of small business owners remain concerned about inflation and 78% are worried about an economic slowdown.
• Small businesses are taking steps to prepare for a slowdown with 41% cutting spending, 41% setting aside emergency funds, 37% are implementing a hiring freeze, 31% are cutting marketing and advertising, 27% pausing expansion, and 27% pausing loan plans.
• 85% of small business owners believe they have benefitted from provisions in the 2017 tax reforms and 54% believe their business would be harmed by the expiration of the 20% deduction.
• 51% of small businesses that are organized as C-corps (corporations) report that the 21% corporate tax rate has made them more competitive.
• 54% of small business owners surveyed are familiar with Corporate Transparency Act (CTA) requirements and 46% have filed the paperwork.

WSJ / Vistage Small Business CEO Confidence Index (October 29, 2024)

Summary: Small business owners’ views on the national economy remain negative and optimism for 2025 ticks upward.

• 23% of small business owners say the economy has improved (5 points higher than September) and 31% say that the economy has gotten worse (8 points better than September).
• 36% of small business owners believe the economy will improve in the next 12 months (4 points better than September) and 14% believe the economy will worsen (8 points better than September).
• 52% of small businesses plan on increasing employees (1 point lower than September).
• 36% of small businesses expect to increase fixed investments in the next year (3 points higher).
• 66% of small businesses expect increased revenues in the next 12 months (1 point higher). 
• 53% believe profitability will improve in the next 12-months (1 point higher than September).
• 45% of small businesses offer hybrid work options of in-office work 2 or 3 days per week (24% are 2-days/week and 21% are 3-days/week).
• 35% of small businesses have fully on-site employees and 14% are fully remote.

National Federation of Independent Business (NFIB) (October 31, 2024)

Summary: Hiring pressures and hiring expectations continue to ease.

• 35% of small businesses reported job openings they could not fill in August (1 point higher than September’s lowest reading since January 2021).
• 53% of small businesses hired or tried to hire in October (6 points lower than September).  Of those hiring, 87% of those hiring reported few or no qualified job applicants (3 points lower than September).
• 15% of small business owners are planning to create new jobs in the next 3-months (no change from September).
• 31% of small businesses raised wages in October (down 1 point from September and the lowest reading since April 2021) and 23% plan on raising compensation in the next 3 months (no change from September).
• 31% of small businesses have openings for skilled workers (1 point higher than September) and 14% have openings for unskilled labor (unchanged).
• 49% of small businesses in construction have a job opening they can’t fill (4 points lower than September).

Looking for More Small Business Insights?

Watch Tom Sullivan talk all things small business with Jim Fitzpatrick on ASBN (America’s Small Business Network), including the latest news and policy updates for Main Street business owners. New episodes are added every month so that you can watch them anytime.

CBIZ Main Street Index Fall 2024 (October 22, 2024) 

Summary: CBIZ’s quarterly survey of employer firms under 100 employees reveals that revenue and profit are trending upward on Main Street while costs seem to be stabilizing. 

• 62% of small employers are fully utilizing staff (1.4 points higher than a year ago) and 7.8% of small employers are considering dropping underutilized staff to cut costs (2.7 points lower than a year ago). 

• 49% of small employers are boosting pay and/or benefits to hire and keep good employees and 42.4% are offering flexible work arrangements to attract and keep good staff. 

• Revenue expectations for small employers has risen steadily from a year ago and 54.5% expect increased revenue over the next 4 months. 

• 57.8% of small employers want policymakers to focus on tax policy in 2025, which is almost 10 points higher than other concerns which include healthcare, regulation, supply chain, technology, access to capital, internet infrastructure, climate change, and trade (listed in decreasing rank of importance).  

• 52.7% of small employers raised prices to deal with inflation this quarter (4.2 points less than a year ago). 

• 72.4% of small employers are using AI and 79.7% believe use of AI helps them stay competitive. 

QuickBooks Holiday Shopping Report (October 15, 2024)

Summary: Good news is that 93% of consumers plan on shopping small this holiday season.  Bad news is that the survey of 5,500 consumers and 2,000 small business owners predicts a 34% drop in holiday spending compared to last year. 

• 23% of consumers believe they will have their holiday shopping done by Halloween and 73% believe they’ll be done before December.
• Black Friday is the most popular holiday shopping day for consumers (66%) and for small business owners (36%) followed by Small Business Saturday (consumers 34% & small business owners 33%).
• Consumers are expecting to spend $294 each at small businesses this holiday season and 88% say that it is important for them to support small businesses.
• 82% of small businesses expect to earn the same or more revenue as last year despite 23% of consumers saying they will spend less this year.
• 90% of consumers say they will be hunting for deals this holiday season, which matches the top tactic small businesses are using to attract customers (34% are offering deals and discounts).

MetLife & U.S. Chamber of Commerce Small Business Index for Q3 (September 24, 2024)

Summary: Small business confidence takes a dip and stays more positive than negative at a local level.  Main Street employers are following the election closely, expect elected leaders to compromise and get things done, and do not want the next Congress to raise their taxes.

• 35% of small business owners are positive about the nation’s economic health (decreased 1 point since last quarter) and 48% are negative about the U.S. economy (1 point more negative).
• 38% of small business owners are positive about the health of their local economy (decreased 5 points since last quarter) and 34% are negative about their local economy (7 points more negative than last quarter).
• 56% of small business owners rank inflation as their top concern (1 point higher than last quarter and the 11^th consecutive quarter where inflation tops the list).
• 66% of small businesses are confident in the health of their own business (no change from last quarter) and 68% are comfortable with their current cash flow (5 point decrease from last quarter).
• 22% of small businesses increased staff over the past year (no change from than last quarter and tied with the highest level reached 2-years ago) and 44% of small businesses anticipate increasing staff in the next 12-months (3 points higher than last quarter).
• 71% of small business owners are more interested in the upcoming election than 4-years ago.
• 84% of small business owners feel that partisan gridlock is a serious problem in Washington and 75% believe that political leaders should compromise to get things done (7 points higher than 4-years ago).
• 88% of small business owners said that it is very important the next Congress does not raise taxes on businesses.

U.S. Chamber Technology Engagement Center: Impact of Technology on U.S. Small Business​ (September 16, 2024)

Summary: Small business reliance on technology for growth is up fueled by AI.

• 99% of small businesses use at least one technology platform compared to 93% in 2022 and 95% in 2023. Social media platforms top the list (66%) followed by digital payments (57%) and accounting (56%).
• 85% of small businesses are confident that technology will help their businesses grow (up 3 points from 2023).
• 40% of small businesses are using generative AI (up 17 points from 2023) and marketing/promotions show most frequent use of generative AI (56%).
• 60% of small business owners believe AI will help their businesses (up 5 points from 2023).
• 54% of small business owners are worried that government regulation of technology would harm their business, with 78% worried that limiting access to AI will slow their ability to grow their business.

About the authors

Thomas M. Sullivan

Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.

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