Survey: Two-Thirds of Small Businesses Expecting Recession
A new survey from Nationwide finds that small businesses in the U.S. are increasingly growing concerned about the economy — even as they continue to roll back pandemic-era cost-cutting measures.
The survey results:
Headlining Nationwide’s survey is the fact that 68% of respondents stated that they expected a recession to hit within the next six months. What’s more, of those small businesses who anticipated a recession, 71% predict that it will be similar to or even worse than the “Great Recession” that the U.S. endured from 2007 to 2009.
Meanwhile, only 19% of small businesses express optimism about the current economy, marking an eight-point decline from a similar survey conducted in September 2022. However, on a local level, respondents were a bit more positive, with 40% saying conditions were “good” or “excellent” in their city/region. That’s up 4 points from the previous survey.
Asked whether their businesses were threatened more by inflation or the possibility of a recession hitting later this year, small biz respondents were split 60% to 40% respectively. Those with mid-sized businesses were more likely to pick “inflation” in that match-up, with two-thirds choosing that option.
Despite current challenges and recession fears, the survey also found that small businesses are continuing to reverse cuts they made in recent years. In fact, 21% of respondents report hiring workers in the past six months compared to 13% who said the same in September. On the other end of the spectrum, only 6% of small businesses surveyed said they’ve had to lay off workers, which is down 4 points from the fall survey. Elsewhere, businesses are staying open longer as only 10% report reducing hours. That is down significantly from the 17% of respondents that reduced hours last year.
What they’re saying:
Commenting on the survey results, Nationwide’s President of Business Insurance Russ Johnston stated, “Business owners are closely analyzing today’s economic uncertainty, but they’re also confident in their operations as they manage through the conditions to best meet demand and remain competitive.”
Johnson continued, “As business owners navigate the tight labor market to add staff, get back to traditional operating hours and explore cost-saving strategies, it is imperative that they review risk and ensure the business does not compromise on long-term protection.”
There’s no doubt that the past few years have been challenging for small businesses. From shutdowns to supply chain issues and inflation to a (possible) recession, it’s really been one thing after another. Nevertheless, these businesses have shown how resilient they are through it all. Therefore, even if the expected recession does come, rest assured that many of America’s small businesses are ready to weather yet another economic storm.