Despite lingering inflation — which has dropped significantly since 2022 — small business owners continue to feel confident, according to the Q3 2024 MetLife and U.S. Chamber of Commerce Small Business Index.
The index score, which measures the perception of business owners and/or operators in regard to business operations, expectations, and environment, is currently 71.2. The last time the score was this high was in Q1 2020 (71.7), right before the start of the COVID-19 pandemic.
Here are a few key findings from the latest survey.
[Read more: 5 Inflation-Beating Deals Your Small Business Can Offer]
Expectations are high for the year ahead
Small business owners of all sizes, sectors, and genders have one thing in common: They continue to feel optimistic about the year ahead. Almost three-quarters (73%) of owners expect an increase in revenue within the next year. This sentiment matches the data of last quarter and is the highest recorded percentage since the survey’s inception in 2017.
“As we head into the final quarter of 2024, it is encouraging to see the continued optimism of small business owners driving the Index score to near pre-pandemic highs,” said Bradd Chignoli, Executive Vice President and Head of U.S. Group Benefits Regional Business & Workforce Engagement at MetLife, in a press release.
Over the next year, 44% of business owners report they plan to increase their staff, and 45% plan to increase their investment. These findings have remained largely consistent from the previous quarter.
The following demographics were more likely to be optimistic overall about their businesses:
- Male business owners
- Small business owners who have been operating for 10 years or less
- Millennial and Gen Z business owners
[Read more: Why Hiring a Former Business Owner Can Boost Your Success]
Business operations are stable
Regarding business health, cash flow comfort, and staffing increases, two-thirds of small businesses reported being in good health this quarter. This has been a relative norm since Q2 2022.
Although there was a 5% decrease in small business owners’ comfortability in their cash flow from this quarter (68%) compared to last (73%), the loss is not significant. In Q1 2024 and Q4 2023, business owners had similar feelings, reporting a 67% comfortability.
Some small businesses have even increased their staff over the past year (22%). Much like last quarter, millennial and Gen Z business owners, as well as those who have only been in business a short time, were more likely to increase staff.
Citing the economy and inflation as top priorities, 78% of small business owners said these should be topics of focus for the next president and Congress.
“The local economy feels strong. Restaurants and shopping centers are busy,” said small business owner Bryan Owen, Co-CEO of Between Pixels, in a statement. “I’ve been surprised by how much construction has continued even with interest rates high.”
Consistent with historical patterns of this survey, small businesses with more staff were more likely to report positive business health, cash flow, and increased staffing compared to those with fewer employees. Gender of ownership did not play a significant role in the stability of the business.
The 2024 election is a big focus for small business owners
More small businesses (48%) feel negatively about the national economy rather than positively. However, 38% feel their local economies are in good health this quarter, compared to 34% that consider them to be in poor health. As observed in the past year’s worth of data, male business owners are more likely to report the national and/or local economy is in good health compared to female business owners.
With more negative views than positive on the national and local economies, it’s not surprising that 71% reported more interest in the 2024 election than in the previous cycle.
“Main Street businesses know that policies and regulations coming out of Washington have a direct impact on their bottom line, so they’re paying attention to the candidates’ views on the economy, inflation, and taxes, in particular,” said Tom Sullivan, Vice President of Small Business Policy at the U.S. Chamber of Commerce. “This quarter’s survey data shows strong confidence from small businesses around revenue and hiring heading into the election, and they want to ensure that growth continues.”
Citing the economy and inflation as top priorities, 78% of small business owners said these should be topics of focus for the next president and Congress. Additionally, the majority (88%) said it is “very important” for the government not to raise business taxes.
This summary provides a snapshot of how small businesses feel about the current economic climate and the future of their small businesses. Read the full Q3 2024 Small Business Index report for more insights.
[Read more: How Small Businesses Stay Competitive in a Challenging Economy]
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