Small Business Outlook: Confidence Continues to Rise

Small business optimism continues to surge post-election even while Main Street employers are expecting higher labor costs. 

Our weekly survey and analysis of the latest data from leading organizations includes new data this week in NFIB’s Economic Trends Report and Biz2Credit’s Top Small Business Industries Report. 

Also new this week? The Q4 MetLife & U.S. Chamber of Commerce Small Business Index, which shows about half of small business owners and decision makers say they are spending too much time and money navigating regulatory requirements and that it’s impacting their growth. The quarterly index also shows small business optimism.

New Small Business Data

MetLife & U.S. Chamber of Commerce Small Business Index for Q4 (December 16, 2024)

Summary: Concerns over regulatory costs escalated right before the election and small businesses’ negativity towards the national economy continued to shrink. 

• 32% of small business owners are positive about the nation’s economic health (up 8 points since this time last year). 
• 38% of small business owners are positive about the health of their local economy (no change from last quarter and up 8 points since this time last year).
• 55% of small business owners rank inflation as their top concern (1 point lower than last quarter and the 12th consecutive quarter where inflation tops the list).
• 67% of small businesses are confident in the health of their own business (1 point higher than last quarter) and 72% are comfortable with their current cash flow (4 points higher than last quarter).
• 22% of small businesses increased staff over the past year (no change from the last two quarters and tied with the highest level reached 2-years ago).
• 70% of small business owners view the last quarter as critically important for their overall profit.
• 51% of small business owners view regulatory compliance costs are a barrier for growth and 47% of small business owners believe they spend too much time fulfilling regulatory requirements.
• 69% of small business owners feel it is harder for them to comply with regulatory requirements than their larger business competitors.
• Tax compliance and recordkeeping both top the list of compliance burdens when asked about time spent complying with regulations (73%).
• While 89% of small business owners are confident in their knowledge of regulatory requirements, 77% report using Google for answers when confronted with tricky compliance questions.

National Federation of Independent Business (NFIB) Small Business Optimism Index (December 10, 2024)

Summary: Small business optimism blasts upward after the election even while expecting higher labor costs.

• 36% of small business owners expect the economy to improve (41 points higher than October).
• -13% of small business owners reported higher sales in the past 3-months (7 points better than October) and the percentage expecting higher sales rose 18 points to reach 14% (highest level since February 2020).
• 36% of small businesses reported job openings they could not fill (up 1 point from October).
• 32% of small business owners raised compensation (up 1 point from October) and 28% plan on raising compensation in the next 3-months (up 5 points from October and highest level of the year).
• 20% of small business owners ranked inflation as their top concern (down 3 points from October and still the top cited problem) and 19% said that labor quality is their top concern (1 point lower than October).
• 24% of small businesses raised their prices (3 points higher than October) and 28% are planning on raising prices in the next 3-months (2 points higher than October).
• 54% of small business owners reported capital outlays in the last 6-months (no change from October) and 28% are planning capital purchases in the next 3-months (up 6 points). 
• -5% of small business owners expect better credit conditions in the next 3-months (1 point better than September).
• 14% of small business owners believe now is a good time to expand (8 points higher than October).
• 62% of small business owners are not interested in a loan (2 points lower than October) and 28% report borrowing on a regular basis (up 3 points from October).
• 5% of small business owners reported that financing was their top problem (up 2 points from October).

Biz2Credit 2024 Top Small Business Industries Report (December 5, 2024)

Summary: Analysis of over 90,000 credit applications submitted between January 2023 and June 2024 provides insight on America’s small business economy.

• Manufacturing topped the list of sectors for highest average revenue in 2023 at $1.2 million and Wholesale Trade took over at the top in the first half of 2024 at $1.3 million.
• Healthcare & Social Assistance topped the sectors for highest loan approval rates (46%) and Construction was the sector with the lowest loan approval rates (25%).
• Information Technology topped the sectors for highest average funded amount ($98,000) and Healthcare & Social Assistance was the sector with the lowest average funded amount ($88,000).
• Manufacturing topped the list of sectors by credit score (676) and Administrative and Support and Waste Management was lowest (661).
• California was the only state listed among the top 3 states by funded amount in all 6 sectors.

Nerd Wallet 2024 Small Business Report (December 3, 2024)

Summary: Entrepreneurship continues to attract new small business owners.

• 19% of Americans benefit from small business income and 26% of those small business owners created their business in 2024.
• The top reason entrepreneurs cite for starting their business is income (50%), followed by their desire to control their schedule (35%).
• The top challenge cited by respondents is finding and retaining customers (54%) followed by high prices and inflation (32%).

Fiserv Small Business Index (December 2, 2024)

Summary: Small business sales continue to be up compared to last year and transactions per customer declined.

• Month-over-month sales at small businesses in November dropped 1.6% from October and year-over-year sales at small businesses rose 4.8% compared to November 2023.
• Fastest growing retail categories year over year were Grocery (11.1% growth), General Merchandise (11% growth), Clothing (7.3% growth), and Furniture, Electronics, and Appliances (6.8% growth).
• Food Services and Restaurants experienced a 3.1% increase compared to October and 8.1% increase compared to November 2023. Caveat – average ticket sizes declined 1.3% compared to a year ago.
• Service-based small businesses experienced a month-to-month sales decline of 1.8% since October and grew 5.1% compared to November 2023. 

Q4 2024 CNBC | SurveyMonkey Small Business Survey (November 29, 2024)

Summary: Post election optimism is high for small businesses even while anticipating higher inflation.

• Inflation continues to top the list of concerns by small business owners and 58% believe inflation will continue to rise.  40% of small business owners believe inflation has peaked.
• 59% of small business owners have a positive view of the economy and 63% of small business owners expect increased revenue in the next 12 months (up 11 points from last quarter).
• 36% of small business owners expect to increase staff in the next 12 months (up 12 points from last quarter) and 37% believe it is harder to find qualified job applicants than it was a year ago.
• 42% of small business owners expect that changes in tax policy in the next 12 months will have a positive effect on their business and 28% believe changes will have a negative effect.

WSJ / Vistage Small Business CEO Confidence Index (November 25, 2024)

Summary: Small business confidence improves after the election with skyrocketing anticipation of higher revenues and profitability.

• 28% of small business owners say the economy has improved (5 points higher than October) and 28% say the economy has gotten worse (3 points better than October).
• 63% of small business owners believe the economy will improve in the next 12 months (27 points better than October) and 13% believe the economy will worsen (1 point better than October).
• 64% of small businesses plan on increasing employees next year (12 points higher than October) and 3% plan on shrinking their workforce (4 points lower than October).
• 45% of small businesses expect to increase fixed investments in the next year (9 points higher than October).
• 79% of small businesses expect increased revenues in the next 12 months (13 points higher than October) and *69% believe profitability will improve (16 points higher than October).
• 51% of small business owners rank “tax policies” as the most likely to impact their business within a list of anticipated policy priorities of the new Administration.

Small Business Fast Facts

Small Business Data Center

Read more

Honoring America's Top Small Businesses

The Results Are In. These Are America's Top 100 Small Businesses

Read more

U.S. Chamber Technology Engagement Center: Impact of Technology on U.S. Small Business​ (September 16, 2024)

Summary: Small business reliance on technology for growth is up fueled by AI.

• 99% of small businesses use at least one technology platform compared to 93% in 2022 and 95% in 2023. Social media platforms top the list (66%) followed by digital payments (57%) and accounting (56%).
• 85% of small businesses are confident that technology will help their businesses grow (up 3 points from 2023).
• 40% of small businesses are using generative AI (up 17 points from 2023) and marketing/promotions show most frequent use of generative AI (56%).
• 60% of small business owners believe AI will help their businesses (up 5 points from 2023).
• 54% of small business owners are worried that government regulation of technology would harm their business, with 78% worried that limiting access to AI will slow their ability to grow their business.

Looking for More Small Business Insights?

Watch Tom Sullivan talk all things small business with Jim Fitzpatrick on ASBN (America's Small Business Network), including the latest news and policy updates for Main Street business owners. New episodes are added every month so that you can watch them anytime.

About the authors

Thomas M. Sullivan

Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.

Read more