Surveys Say Small Business Owners Worried About Inflation, But Are Doing Well Overall

Despite worries about inflation, hiring, the supply chain and the lingering coronavirus pandemic, business owners are profitable and expected to continue that trend, according to two new surveys released last week.

The US Chamber of Commerce, a national advocacy group for businesses, released its Small Business Index for the first quarter of 2022. The report, released four times per year since 2017, is an indicator of how business owners with fewer than 500 employees think about the state of their business and the larger economy.

In Iowa, 99.3% of businesses fall under that category, with 47.8% of Iowa workers employed at such companies, according to the US Small Business Association.

In the chamber’s survey, business owners largely thought their own company’s overall health was “somewhat good,” at 33% of respondents, up from 31% last quarter. “Very good” came in at 28%, a slight drop from 30% last quarter.

“Small business owners are feeling good about the health of their businesses and expectations for the future,” the chamber said in a release, noting the index was a “new pandemic-era high score.”

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The Iowa Business Council (IBC) released a similar first-quarter survey, the Economic Outlook Survey. The outlook was similarly optimistic.

“Business leaders are monitoring global unrest, supply chain issues, and workforce challenges, but generally expect robust demand,” said Tim Yaggi, CEO of Pella Corp. and IBC chair.

Business owners were adding staff, investing in their companies, and making comfortable profits, and were largely optimistic that would continue, according to the chamber’s survey:

• On the question of cash flow, 47% of respondents said they were “somewhat comfortable,” an increase over 38% of respondents who felt that way in the same quarter last year.
• Forty percent said they planned to increase investment in their business. Only 10% said they would reduce investment—the lowest since the start of the pandemic.
• When it came to staffing needs, 19% said they added employees in the past year, while 15% cut positions. And 37% said they planned to add more positions next year, with only 6% expecting to cut staff.
• On the question of revenue, 63% of owners said they expected their revenues to increase in the next year. That’s the highest percentage since the chamber began asking the question.

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Despite acknowledging they were doing well overall, 35% thought the health of the US economy was “somewhat poor.” But that’s down from a year ago when 42% of respondents thought that of the broader economy. The chamber noted it depended largely on the type of business as well.

“Small businesses in the services industry have a less positive outlook on the national and local economy compared to those in retail and professional services,” the chamber said.

Regarding inflation, 33% of survey takers noted it was “the biggest challenge facing the small business community.” That was the top concern of the smallest business owners or those with fewer than 20 employees. Larger businesses said COVID-19 and the supply chain were slightly larger challenges for them.

In Iowa, however, hiring was a much larger concern: The majority of respondents in the IBC survey, or 68%, said that was their “top concern” and was “difficult” or “very difficult.” In February, Iowa Workforce Development reported that there were more than 86,000 open jobs in the state while fewer than 60,000 people were unemployed.

In response to those issues, 67% of business owners in the Chamber survey said they raised their prices for goods and services over the past year.

By Amie Rivers
04/06/22

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