Majority of Main Street Businesses Remain Confident Despite Persistent Economic Challenges
The CBIZ Main Street Index finds almost two in three SMBs maintain a positive outlook despite experiencing compounding effects of inflation, supply chain slowdowns and staffing shortages
While 64% of businesses remain positive in their outlook, the CBIZ Business Confidence Study, a weighted average of responses to the Index’s business confidence-focused questions, dropped more than 12 points from the first quarter, with the score now standing below 60.
The survey, which was conducted
“Main Street businesses are a bellwether of the American economy, and this quarter’s results prove that once again,” said
The data was assessed from an overall perspective, as well as based on company size, region and industry. An interactive infographic with the results is available on the CBIZ website. Key findings include:
- Despite the current economic climate, 64% of respondents say their confidence level remains positive – Twenty-one percent of business owners report their outlook is very positive. While the most common challenges indicated in the survey include coping with record inflation, supply chain constraints and staffing shortages, business owners remain confident and nimble as they navigate through these negative economic factors.
- The majority of businesses remain resilient while combating a multitude of challenges brought on by high prices and a potential slowdown in economic activity – Despite various negative headwinds, businesses continue to show strong levels of resilience. As owners continue to be challenged by risks, different opportunities for success also present themselves, leading to the generally positive sentiment of SMBs.
- Inflation is a top-three concern for 80% of businesses surveyed – The high costs of goods and services continue to impact day-to-day business operations. Even though inflation remains at record levels, owners continue to find ways to adapt, primarily by passing costs on to customers. Sixty-one percent of businesses have increased the price of products and services by at least 5%, while 29% of businesses have hiked up prices by 10 or more percent. In part due to inflation, four in five businesses say they’ve seen labor costs significantly (33%) or modestly (47%) increase in Q2.
- The ongoing supply chain issues have caused shortages of inputs, contributing to producer price increases among other challenges – As a response, 50% of businesses have increased prices on consumers. Alternatively, as SMBs in a number of industries continue to navigate around the bottlenecks in the supply chain, 29% indicated they have changed suppliers to get the products they need. Twenty percent of businesses report they are no longer dealing with supply issues.
- 62% of businesses indicate staffing shortages are either greatly (25%) or moderately (37%) affecting their day-to-day operations – For the fourth straight quarter, staffing shortages are a top-of-mind concern for small businesses. Thirty-seven percent of business owners surveyed stated they had the most difficulty finding skilled workers. To attract and retain talent, more businesses are enhancing compensation and benefits packages.
*Note: Not all those surveyed in the CBIZ Main Street Index are clients of CBIZ.