More small business owners believe the economy is improving, according to the latest Small Business Index from the U.S. Chamber of Commerce and MetLife.
The index rose slightly to 62.3 from 61.3 in Q4 2023, which the U.S. Chamber noted reflected a stable business climate. One in three (32 percent) of small business owners said the U.S. economy was in good health, up 7 percent from the previous report. Further, 38 percent said their local economy was in good health, up 8 percent. Nearly two-thirds of small businesses said the overall health of their business was good and 67 percent reported being comfortable with their cash flow.
“Small businesses’ perceptions of the economy are drifting upward, with businesses reporting being comfortable with their cash flow and the health of their business,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. “While many business owners have continued to struggle with high prices and rising wages, recent jobs reports are positive. While headwinds remain, confidence is ticking upward and small businesses are more resilient and prepared for unforeseen challenges.”
Despite the improvement, nearly half of respondents felt the economy was in poor health. Much of that perception is likely fueled by continuing high levels of inflation, which 52 percent of businesses cited as a top challenge. Concern for revenue also rose 7 percent, with 29 percent of small businesses now calling it a top challenge.
Although some areas of concern remain elevated, MetLife and the U.S. Chamber believed the overall numbers were trending in a positive direction. “It is encouraging to see the majority of small business owners are satisfied with their business’s health and their current cash flow, despite ongoing concerns around inflation,” said Cynthia Smith, senior vice president and head of regional business at MetLife. “These trends convey a sense of optimism for the future and, once again, underscore the adaptability and determination shown by small business owners in challenging economic environments.”
For the full Small Business Index report, please click here.