Mixed Signals for Small Businesses: A Recap of Recent Economic Reports

Beasties store window decorated for the holidays.

December 13, 2023 | The US Chamber released the Q4 MetLife & U.S. Chamber Small Business Index on December 12, which stands at 61.3, a decrease from the Q3 Index score of 69.2. This quarter’s score is close to sentiments observed earlier in the year and late 2022, falling below the previous quarter’s score of 69.2. The decline in small businesses’ perception of the national and local economies contributed to this decrease.

Based on a poll conducted between October 5-24, 2023, 25% of small businesses believe the U.S. economy is in good health, and 30% express the same sentiment about their local economy. Both figures have declined by eight percentage points since the last quarter. Although optimism regarding future revenue expectations remains widespread, there has been a softening in this measure as well. Approximately 65% of small businesses anticipate an increase in revenue next year, down from a record-high 71% in the previous two quarters.

Small businesses continue to grapple with concerns about persistent high inflation. For the sixth consecutive quarter, at least 53% of small businesses cite inflation as one of their most significant challenges. However, there is a potential leveling off of these concerns, as the percentage citing inflation as the top concern has held steady at 52-54% since Q4 2022.

While national reports suggest a degree of optimism, we aim to contrast this with the experiences of local businesses in Richmond. Your input is invaluable in providing a localized perspective. Please take a moment to complete the survey below and share your insights on the current state of affairs for businesses in our area.

December 6, 2023 | The U.S. Chamber of Commerce recently released promising findings for the week of December 4, 2023, showcasing record-breaking holiday shopping numbers. Small businesses, particularly those with an online presence, reaped the benefits of the largest online shopping spree in American history.

While inflation remains a challenge, there are positive signs of decreasing costs. Strong holiday sales and the increasing trend of small businesses venturing into online sales bring a ray of sunshine to the small business sector. However, persistent challenges, such as the ongoing struggle to hire skilled employees and rising federal regulatory costs, create a partly cloudy outlook for Main Street.

In a prior report, small businesses expressed optimism about increased revenue for the upcoming year, despite the hurdles of high inflation and interest rates. Key insights include:

  • 13% of small business owners believe the economy has improved in the past year, while 40% remain neutral, and 47% perceive a downturn.
  • 63% of small business owners feel the impact of interest rates on their businesses, a 5-point increase since October.
  • Views on the U.S. being in a recession have remained relatively stable, with 11% indicating a soft landing, 20% claiming a recession, and 39% foreseeing an approaching recession.
  • Looking ahead, 57% of small businesses are optimistic about expected revenues in the next 12 months, with 42% anticipating improved profitability.

Additionally, the Prosper Insight & Analytics report on NRF’s annual shopping survey revealed:

  • Black Friday dominated the record-breaking 5-day period for holiday shopping, with 200.4 million consumers participating.
  • Online holiday purchases increased by 4 million consumers, while in-person retail store shopping declined by 1.3 million consumers.
  • Sales and promotions drove 55% of purchases, marking a 3-point increase from the previous year.
  • Small businesses saw a boost on Black Friday, with 166.8 million shoppers making purchases between Thanksgiving and Small Business Saturday.

In contrast, the American Express Small Business Saturday Report for November 27, 2023, indicated a drop of $900 million in purchases compared to the previous year:

  • Small Business Saturday spending reached $17 billion, but it decreased from the previous year.
  • In-person shopping dominated, with 68% of Small Business Saturday shoppers making purchases at physical stores.
  • Online shoppers showed a preference for small businesses, with 53% choosing them over large retailers.

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