Inflation concerns are at a new high for small business owners

Washington —MetLife Quarterly and US Chamber of Commerce Small Business Index, released today, found that inflation concerns among small business owners have reached a new high. The majority (90%) of small businesses say they are concerned about the impact of inflation on their business, with 54% saying they are a lot concerned, up from just 31% in Q1.

Half of small businesses (50%) say inflation is the biggest challenge facing small businesses right now, marking the fifth straight quarter of rising inflation concerns. Seven in ten (71%) believe the worst is yet to come in terms of inflation.

“In recent quarters, there was optimism from small businesses that still felt good about how their business was doing,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. “However, inflation is really hitting small businesses hard, and that reality is having a negative impact on their confidence, their ability to hire, invest in their business and grow.”

Heightened pessimism about the economy likely contributed to the index’s biggest drop since the start of the pandemic to 62.1, down from 66.8 in Q2. In addition, small businesses say they are now less confident about both the national economy and their local economy — and their current cash flow.

The survey found that 88 percent of small businesses are concerned about the U.S. entering an economic recession next year, with 54 percent saying they are a lot disturbed. A majority (59%) of small business owners think the U.S. economy is in either “somewhat bad” or “very bad” shape, up 10 percentage points from last quarter.

While two in three (66%) say they are comfortable with their current cash flow, this is down from 73% last quarter, the first significant decline since April 2020. Also slightly down this quarter was the percentage of small businesses that expect to increase staff (38%) and those who predict an increase in revenue in the next year (61%).

Small business owner Tom Richter has seen the impact of inflation on his Midvale, Utah-based commercial cleaning services company.

“The increase in gas has forced us to increase prices for all customers. The increase in raw materials has affected the chemicals and equipment used in our business,” says Richter, principal owner of Utah-based JAN-PRO. “Our franchise owners have had to increase the wages of their employees who do the day-to-day work.”

Among small business owners who say rising prices have had a significant impact on their business (83% of respondents), most cite the cost of goods and supplies (65%) and utilities or fuel (50%) as the most commonly seen effects.

“The growing negative sentiment and concern among small business owners underscores the challenging economic environment they are currently navigating,” said Cynthia Smith, senior vice president, regional business at MetLife. “We’ve seen how resilient small businesses can be, even in the face of adverse business conditions, and that kind of toughness will be required of small business owners as they face increasing economic uncertainty.”

More findings:

  • When asked to select between reducing inflation or avoiding an economic downturn, 59% think the priority right now should be reducing inflation, and 41% prioritize avoiding an economic downturn.
  • To cope with inflation, 7 out of 10 small businesses report raising prices in response to inflationary pressures, followed by those who say they have taken out a loan (40%), cut staff (37%) or lowered the quality of their products or services (31%).
  • 42% say their local economy is in poor health, surpassing the share who say they are in good health (31%) for the first time since Q1 2021.
  • 3 out of 4 small businesses (76%) say they have a plan to adapt to the changing economy. A majority (61%) believe that the economy is changing faster these days than in the past.
  • 40% say they are a lot disturbed on the impact of rising interest rateson their business (up 11 percentage points from Q1 2022).
  • A majority (51%) say they have changed their supply chains to rely more on local suppliers in the past year, a sign that small businesses may be shortening their supply chains.
  • Concerns about COVID-19 have faded, to 13%, from 23% at this time last year, as economic issues grow in importance.

About the Small Business Index

MetLife and the US Chamber of Commerce Small Business Index is part of a multi-year collaboration between MetLife and the US Chamber of Commerce to elevate the voice of America’s small business owners and highlight the important role they play in the nation’s economy. The quarterly index, an online survey of 752 small business owners and decision makers, is designed to take the temperature of the sector, to see where small business owners are confident and where they are experiencing challenges.

The Q3 2022 survey was conducted between July 21 and August 8, 2022. The survey has a confidence interval of plus or minus 4.4 percentage points for all respondents.

About the US Chamber of Commerce

The US Chamber of Commerce is the largest business organization in the world, representing companies of all sizes in every sector of the economy. Our members range from small businesses and local chambers of commerce that line America’s high streets to leading industry associations and large corporations.

They all share one thing: they rely on the U.S. House to be their voice in Washington, across the country and around the world. For more than 100 years, we’ve advocated for pro-business policies that help businesses create jobs and grow our economy.

About MetLife

MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers to navigate their changing worlds. Founded in 1868, MetLife has operations in more than 40 markets worldwide and holds leading positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information visit

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