Small business owners are growing increasingly concerned about the fate of the U.S. as the economy continues to grapple with high inflation, supply-chain disruptions, labor shortages, and rising interest rates.
Fox Business reported that a recently conducted poll by the business-coaching and peer-advising firm Vistage Worldwide Inc. shows that 57% of small business owners predict that the U.S. economy will only worsen in the next year. This metric matches the April 2020 mark for the lowest level of confidence.
Last month, 42% of small business owners had the same pessimistic feelings about the economy.
The Vistage Worldwide poll is part of a more extensive confidence index that revealed the largest year-over-year drop of confidence in the economy since COVID-19 lockdowns commenced in the spring of 2020.
As prices continue to rise, the number of small businesses that are expecting their revenues to increase in the coming year dropped to 61%, marking a steep decline from May 2020’s level of 79%.
The poll also provides data indicating that these small business owners’ pessimistic views of the economy largely rely on the industries their businesses are in. For instance, business owners in manufacturing and consumer products and services are especially pessimistic.
Even large corporations are feeling the impact of supply-chain disruptions, runaway inflation, and worker shortages. Walmart, for instance, reported an increase in sales in the most recent quarter but also noted that higher costs for products, employees, and freight cut into the company’s profits.
Similarly, Target’s profits were lower in its quarterly earnings, as indicated by filings from earlier this month. Target indicated that increased costs caused by supply-chain disruption and ongoing inflation hurt the company.
However, unlike mega-retailers like Target and Walmart, small businesses do not have as much financial flexibility to weather the storm, so they often feel the impact of these economic woes far more directly.
Many small business owners have said that their companies have been hurt by the COVID-19 pandemic and by a number of economic challenges, and the government aid programs that helped alleviate some of the financial burden caused by the pandemic have largely run out of funds.
That being said, not every small business owner is pessimistic about the future of the economy. Factors like low unemployment, strong consumer spending, and record demand for workers are invigorating to some small business owners.
12% of businesses expect the economy to improve within the next year and 28% said they believed conditions would likely remain the same.