Thomas M. Sullivan
Vice President, Small Business Policy, U.S. Chamber of Commerce


March 27, 2023


The Latest Forecast

Still sunny and springtime warmth is creeping in.  Strong headwinds make it seem colder, but insulation is working. Storm clouds remain on the horizon, but are not imminent.

What it means: The latest data show how remarkably resilient small businesses continue to be in the face of strong inflationary headwinds. Small businesses are taking steps to weather a tighter credit environment and are wary of tough times ahead.

Listen: Tom Sullivan and National Federation of Independent Business (NFIB)'s Holly Wade talk about their small business forecasts on a weekly podcast. Listen here.

Explore key takeaways from the latest small business reports below. The next MetLife & U.S. Chamber Small Business Index release is Wednesday, March 29, 2023.

New Small Business Data

EIG Analysis of Census Business Trends and Outlook Survey (BTOS) (March 23, 2023)

Summary: BTOS, produced by the Census Bureau, provides biweekly data on small business. Economic Innovation Group’s (EIG) analysis of the latest data shows steady resiliency by small employers in the face of inflationary headwinds.

  • Fears of future supply chain challenges are abating with 80% of small businesses expecting no change to supply schedules 6-months from now (5.8 points better than the beginning of this year).
  • 20.5% of small businesses report hiring difficulties (same as during the beginning of this year).  Expectations for adding employees rose slightly, consistent with a slight rise in optimism that hiring will be easier in 6-months compared with January data.
  • Small businesses rate their current performance almost identically to how they felt at the beginning of this year and expectations for future performance rose 2.3 points since January, signaling a cautiously optimistic outlook for small employers.

Intuit QuickBooks Small Business Index (March 14, 2023)

Summary: Intuit’s new monthly indicator of employment and hiring on Main Street utilizes anonymized QuickBooks records from a sample of over 300,000 businesses with 1-9 employees. While this initial Index shows a drop in employment, the broader small business job creation picture remains positive with hiring by small businesses spiking at the end of 2021 due to record-breaking startup growth. That growth has lessened, but remains above pre-pandemic levels.

  • Overall, small businesses with 1-9 employees shed 7,600 jobs in February (decrease of -0.06% compared to January).
  • Small businesses added jobs in Utilities (0.56%), Natural Resources and Mining (0.29%), and Leisure and Hospitality (0.27%).
  • Industries that experienced job declines in Feb. were Information (-0.6%), Manufacturing (-0.33%), and Finance and Real Estate (-0.24%).
  • The nation’s highest employment growth for small businesses with 1-9 employees last month was New England (0.33%).  The highest Main Street employment shrinkage was experienced in the Mid-Atlantic (-0.18%).

National Federation of Independent Business (NFIB) Small Business Optimism Index (March 14, 2023)

Summary: Small businesses’ outlook on the economy is negative, but expectations for their own sales remains strong.

  • 47% of small business owners reported job openings that were hard to fill (up 2 points from January).
  • 60% of small business owners reported capital outlays in the last 6 months (1 point higher than January) and 21% are planning capital outlays in the next few months (unchanged from January).
  • -6% of small business owners reported higher sales in the past 3-months (2 points worse than in January) and the percentage expecting higher sales improved 5 points from January to -9%.
  • -47% of business owners are expecting better overall business conditions (2 points worse than January).
  • 38% of small businesses raised prices in the past 3-months (down 4 points from January).
  • 46% of small businesses reported raising wages (unchanged from January) and 23% plan to raise compensation in the next 3 months (up 1 point from January).
  • 25% of small business owners reported all their credits needs are met (down 1 point from January) and 62% said they were not interested in a loan (up 2 points from January).

UpSwell Small Business Owner Sentiment Survey (March 7, 2023)

Summary: 20-year survey of businesses between $100,000 - $250 million annual revenue. Difficulty in finding qualified workers is tamping down growth plans, but owners continue to be bullish on the health of their own businesses.

  • 90% of small businesses expect their revenue this year to be at or above last year’s levels, with 66% of small business owners bullish about their success this year.
  • Over 47% of small business owners cite inflation as their top concern (17 points higher than a year ago).
  • 73% of small businesses experienced increased costs in 2022 and 68% of those businesses passed some or all of those increases on to their customers.
  • 35% of small business owners cited lack of capital / cash flow as their biggest operating burden and 22% cited retention and recruitment of employees as their biggest operating burden.  Marketing/Advertising (16%) and Administrative work (11%) followed on the list of burdens.
  • 70% of small businesses plan on maintaining the same size work force this year.  20% of small businesses plan on increasing the number of staff and 9% plan on downsizing their staff.

Federal Reserve 2023 Report on Employer Firms: Findings from the 2022 Small Business Credit Survey (A Collaboration Among the 12 Reserve Banks, March 8, 2023)

Summary: The annual SBCS represents a survey that reached almost 8,000 employer firms between September and November 2022. The post-COVID elation that caused a spike in optimism on Main Street has leveled out and the shift away from government sources of funding towards community banks shows a trend towards pre-pandemic normal that will likely continue throughout 2023.

  • 45% of small businesses reported operating at a profit (up 10 points since 2021).
  • 35% of small businesses expected revenue growth in the next 12-months (down 7 points from 2021).
  • 27% of small businesses expected more hires in the next 12-months (down 4 points from 2021).
  • 34% of small businesses applied for COVID-related government assistance in 2022 (down 43 points from 2021 and down 57 points from 2020).
  • 40% of small businesses applied for a loan, line of credit, or merchant cash advance in 2022 (up 15 points from 2021).
  • 53% of applications were fully funded in 2022 (up 7 points from 2021, but still below 62% full approvals in 2019).

MetLife & U.S. Chamber of Commerce Small Business Index for Q4 2022 (December 14, 2022)

Summary: Inflation concerns hit an all-time high, but supply chain challenges are easing.

Source: Small Business Index
Source: Small Business Index

• The index score of 62.1 has not changed from Q3 when it represented the largest drop (4.7 points) since the 2nd quarter of 2020.

• 39% of small business owners believe their local economy is in poor health, compared to 30% who believe it’s in good health.

• 83% of small businesses have been significantly impacted by rising prices this year.

• 69% of small businesses report raising their prices to cope with inflation (down 1 point from last quarter).

• 53% of small businesses rank inflation as their top concern (up 3 points from last quarter and up 30 points since this time last year) and 16% rank rising interest rates as their top concern (up 2 points from the last quarter).

• 20% of small businesses rank supply chain challenges as their top concern (down 6 points from last quarter).

• 63% of small businesses are predicting higher revenues next year (up 2 points from last quarter) and 40% intend to increase staff (up 2 points from last quarter).

• 64% of small business owners report their businesses are in good health (down 1 point from last quarter).

• 93% of small businesses are engaged in philanthropic or charitable activities during the holidays.

• 79% of small businesses emphasize the importance of the holiday season for an overall profit (9% higher than during this time last year), but 61% expect less revenue due to inflation.

Explore More Small Business Data

The MetLife & U.S. Chamber of Commerce Small Business Index is released quarterly to deliver a comprehensive quantitative snapshot of the small business sector and explore small business owners’ perspectives on the latest economic and business trends.

About the authors

Thomas M. Sullivan

Thomas M. Sullivan

Vice President, Small Business Policy, U.S. Chamber of Commerce

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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