According to the latest U.S. Chamber and MetLife Small Business Index (SBI) report released last week, inflation worries have hit a new high among small business owners. It reveals the most significant drop since the pandemic began. Half of the small businesses said that inflation is their top challenge, the fifth quarter in a row of increasing inflation concerns.
Given a choice between reduced inflation versus avoiding an economic downturn, 59% believed the top priority should be reducing inflation. Nearly nine out of ten (88%) are concerned about the U.S. entering an economic downturn within the next year.
Seventy percent of small businesses reported raising prices due to inflation pressures, 40% have taken out a loan, 37% reduced their staff, 31% reduced the quality of their products or services, and 42% believe their local economy to be in poor health.
Sixty-eight percent of small businesses in the manufacturing and retail sectors said the COVID-19 pandemic had dramatically disrupted or affected their supply chains, and 60% said they had changed their supply chains in the last year to rely more on local suppliers.
The SBI surveyed small business owners between July 21 and August 8, 2022.
This quarter’s SBI score of 62.1 represents the largest drop since the start of the pandemic, down from 66.8 last quarter.