Small Business Confidence Hits Highest Score Since 2020
Believe it or not, small business confidence has reached a post-pandemic high. The MetLife and U.S. Chamber of Commerce Small Business Index score for the second quarter of 2024 has hit 69.5, up from 62.3 last quarter. The Index score is a measurement of SMB owners’ outlook on economic and business trends and is calculated based on a survey of 750 SMB owners and operators over the age of 18. What’s behind this welcome optimism? Let’s dig in.
Confidence for small business owners can mainly be attributed to the improving optimism about the future. Survey results indicate 73 percent of small businesses anticipate revenue growth in the next year, which is the highest level reported since the start of the survey in 2017. Almost half—46 percent—are expecting to increase their investments over the next year, and that’s up 10 points from last quarter’s results. In terms of cash flow, 73 percent of SMBs are comfortable with their income this quarter; 22 percent have hired additional staff in the last year.
There’s also plenty of optimism and curiosity surrounding Artificial Intelligence (AI), and for good reason. A huge majority of respondents are sold on the power of AI: 71 percent of respondents are confident that hiring folks with AI skills will be a time-saver for their business. Perhaps not surprisingly, younger business owners are more sold on AI’s potential: 78 percent of Gen Z/millennial-owned small businesses agree that staffing their companies with employees who have AI skills can save them money, while just 64 percent of Gen X-owned businesses and 54 percent of baby boomer-owned SMBs feel the same.
Tom Sullivan, Vice President of Small Business Policy at the U.S. Chamber of Commerce, noted in the press releasethat “Main Street employers are showing confidence and resiliency in the face of persistent inflation. Last quarter’s survey showed signs of confidence drifting upward with small businesses optimistic about revenues in the next 12 months. Main Street employers’ comfort with cash flow remains high and is a key reason why small business owners are bullish about their ability to meet customer demand and solve challenges facing their communities.”
It’s not all rainbows, however. Inflation is still a major sticking point with business owners. For the 8th consecutive quarter, over 50 percent of SMBs claim inflation is their biggest challenge. And while their views of national and local economies are stable from our previous quarter, this number is still 12 points higher than just a year ago.
We’ll continue to keep you posted on the latest SMB news over at the Financial Pantry, your go-to source for all things small business. And if you’re looking for a lending solution for your business, check out all of ARF Financial’s loan offerings. Our lending process is quick and easy, and it doesn’t require a ton of documentation. Just fill out our online application and one of our seasoned loan consultants will help create the perfect loan to fit your business needs.
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