Small business owners optimistic despite labor shortages and supply chain challenges ahead of the holidays

Testimonial from Thaddeus Swanek, Strategic Communications, US Chamber of Commerce

The MetLife and the Small Business Index (SBI) of the United States Chamber of Commerce in the fourth quarter of 2021 show that small business owners are increasingly optimistic despite headwinds due to labor shortages, inflation and supply chain issues.

According to the survey conducted October 13-27, 2021, more than three in four small business owners (77%) are optimistic about the future of their business. In fact, 62% of small businesses report their business is healthy, up from 55% last quarter, while those who say their business is very healthy are now 30%, up from 20-23% in 2021. .

“Optimism of small business owners is grappling with economic uncertainty, but they now face new hurdles with rising inflation, labor shortages and supply chain challenges.” said Tom Sullivan, vice president of small business policy at the US Chamber of Commerce. “Meeting these challenges will be key to sustaining Main Street optimism and the country’s economic recovery. “

Most find that supply chain disruptions make vacations difficult.

Most small businesses face supply chain impacts during the most important part of the year for them.

Three in five small businesses (60%) say they expect supply chain disruptions to make it difficult for their business to manage the holiday season this year. They also see supply chain problems persist until 2022. Almost two-thirds (64%) of small businesses say they expect supply chain disruptions to last at least six months.

“Since the lack of materials and low staffing levels in our partner factories make it harder to process each order. Things that could be done in 48 hours now take two weeks. Things that normally take two weeks take four, ”says Julianne Weiner, COO of Sonic Promos in Gaithersburg, Maryland.

Sixty-one percent of small businesses say the COVID-19 pandemic has significantly disrupted their supply chain, and 55% say labor shortages have done the same.

Small businesses are hungry to hire and invest in 2022

In a sharp reversal from last quarter, more small businesses are looking to hire and invest in the coming year.

Despite persistent labor shortages across the country, 38% of small business owners plan to hire more workers next year, up from 28% in the previous quarter, and the highest score for this measure since the launch of the index in the second quarter of 2017. Investment is also on the rise. : Almost half (42%) say they plan to invest in their business in the coming year, an increase of 13 percentage points from the previous quarter.

What small business owners are saying:

“Our biggest challenge right now is attracting and retaining talent. We have the opportunity to grow our revenue with a significant number of new customers and increased orders from existing customers, but we need more members of the production team to capitalize. – Lori Tapani, Co-CEO, Wyoming Machine based in Stacy, Minnesota.

The figure in the headlines: Reached the peak of the pandemic era

The current Small Business Index score is 63.0, the highest score since the start of the pandemic. This score is up from the last quarter’s score of 56.6 and the pandemic’s nadir in the second quarter of 2020, when the score hit an all-time high of 39.

SBI Q421 Report Charts Score Over Time

Other key findings:

  • Confidence in the economy is stable. Confidence in the US economy is unchanged from the previous quarter, with around a third (32%) rating it as good. Slightly more (39%) of small business owners rate the health of their local economy, but this figure is also statistically unchanged from the previous quarter (42%).
  • Inflation and incomes remain big concerns. This quarter, inflation was among the most cited concerns for small business owners (23%), along with revenue (26%) and COVID-19 security / compliance (21%).

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