Small Businesses Remain Confident, Undeterred by Economic Outlook
Just 20% of business owners said that lingering COVID-19 pandemic-related issues pose a challenge for their businesses, marking a 19% decrease from last year.
More than two-thirds (68%) of small business owners said they've experienced success in 2023, which is on par with data collected in 2022. However, the small business community has yet to return to pre-pandemic levels of satisfaction, as 76% of owners in 2019 stated they'd enjoyed a successful year.
Other Findings
· The perception of success is highest among businesses with 11-50 and 51-plus employees, with close to 100% of respondents in these categories indicating success in the last year. This is a stark contrast to the 60% of businesses with 10 or fewer employees sharing feelings of success in the past 12 months. Also, business owners in skilled trades (80%) are more likely to claim success in 2023.
· Confidence in the near-term economy remains low across all states surveyed. South Carolina and Wisconsin have both experienced a 26% decrease in near-term economic confidence since 2021, with just 39% of business owners in the former and 30% in the latter feeling hopeful. Arizona expressed the lowest degree of confidence in near-term conditions at 26%.
· Long-term economic confidence continues to be muted among small business owners. After plummeting in 2021 and 2022 by 14%, confidence in the long-term economy has remained relatively stagnant. Forty-eight percent of total respondents indicated hope for economic conditions in the next two to three years, down 20% since 2019.
· Confidence in business growth declined with the age of respondents. Some 63% of owners more than 55 years old are confident in their business' growth for 2023, an 8% decrease from 2022 and a contrast to the 92% of those aged 18-24 who reported confidence.
· Business owners are less concerned about global conflict (24%, down 10% from 2022) and federal tax law changes (23%, down 4% from 2022) impeding growth in 2023. Rather, they identified inflation (54%, up 3% since last year) and unpredictable market conditions (34%, up 1% year-over-year) as the primary areas of concern.
The First Citizens Bank Small Business Forecast is conducted annually to assess the motivations, sentiments and successes of small business owners across the U.S. This year, the bank expanded its Small Business Forecast from five to 10 states. In previous years, the survey included responses from small business owners in California, Florida, North Carolina, South Carolina and Wisconsin.