Even in the face of stubborn inflation, small business owners are showing a more positive attitude. Optimism about the economy has increased, with the CNBC|SurveyMonkey Small Business Confidence Index reaching its highest level since President Joe Biden took office, according to the latest quarterly data released Thursday morning.
According to the CNBC|SurveyMonkey Small Business Survey, 28% of small business owners say the current state of the economy is “very good” or “good,” up 5 points from last quarter and up from 18% a year ago. It is increasing. This was the most optimistic respondents to this survey since CNBC and SurveyMonkey began asking this question in the second quarter of 2022.
The Small Business Confidence Index measured 47 points out of 100, the highest since Joe Biden took office in the first quarter of 2021.
A recent round of data shows that consumers and small business owners are beginning to express confidence in the economy, although challenges remain.
Sam Gutierrez, senior research scientist at Survey Monkey, said: “We’re starting to see the possibility of turning a corner in terms of optimism among small businesses,” adding that the general outlook for economic strength and in the fight against inflation is increasing. He pointed out that the number of survey responses regarding direction has increased. This survey data has been stagnant for two years.
The Q1 survey was conducted online from January 22 to February 1, 2024 using SurveyMonkey methodology among a national sample of 3,119 self-identified small business owners aged 18 and older. .
Inflation is proving stubborn based on the latest data and remains a burden for business owners, despite significant progress being made in bringing prices down from peak levels. of respondents say it is currently the biggest risk to their business. This is more than double the number of respondents who cited consumer demand, interest rates, labor shortages and supply chain disruptions as key issues.
“Inflation remains the biggest concern,” Gutierrez said. “However, there is cautious optimism on inflation and overall costs.”
Small business owners’ confidence in the Federal Reserve to control inflation is currently at 35%, the highest since early 2022. The proportion of business owners who say inflation has peaked (29%) remains in the minority. The number of people surveyed is also at its highest level since early 2022.
Business owners surveyed say inflation is a factor in their evaluation of candidates for the 2024 election, with 60% of small business owners saying who they will vote for in November. Inflation and interest rates, along with economic growth, are the biggest issues when deciding on economic growth (60%), followed by tax policy (51%).
Last year, John Morman’s small business Celtic Tides was hit by an inflation crisis. Morman imports and sells quilts, jewelry and other items from Wales, Ireland and Scotland. The Lexington, Virginia-based business just celebrated its 25th anniversary.
John Morman and his wife, Mary Jo, run Celtic Tides, a small retail store in Lexington, Virginia, selling imports from Wales, Ireland, and Scotland.
John and Mary Jo Morman
“When dealing with imported goods, rising costs hit us from different directions. International transportation costs have increased; the cost of goods made where we buy products, their cost, their value; “The value of the dollar has gone down,” he told CNBC, adding that costs rose by 15%, but less than half was passed on to consumers.
“We will absolutely refrain from raising prices as much as possible, but inevitably some of these costs will have to be passed on,” he said.
Moman’s biggest concern at the moment is the lack of consumer spending, even though he feels this year overall will be better than last.
“It’s been a very strange year so far. There have been times when I would normally be busy but I haven’t been, and times when I would normally be quiet I have been busy, and the year so far has therefore been one where I As I said, we as a community are a little concerned,” Morman said. “I think there’s still a lot of concern about rising costs.”
