Economic Data
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Summary & Highlights

Index Drops As View of Economy Declines

A group of office workers meeting around a table

This quarter, the Q4 2023 MetLife & U.S. Chamber of Commerce Small Business Index falls to 61.3—close to sentiments from earlier this year and in late 2022—and below last quarter's score of 69.2. Small businesses' declining view of the national economy and their local economy helped drive the headline score down.

According to the poll taken between October 5-24, 2023, 25% of small businesses say the U.S. economy is in good health and 30% say their local economy is in good health, both down eight percentage points since last quarter. While optimism about future revenue expectations is widespread, there has been a softening of this measure too. Almost two-thirds (65%) of small businesses expect revenue to increase next year, down from a record-high 71% expecting the same over the last two quarters.

Small businesses' concerns are still dominated by persistent high inflation. For the sixth consecutive quarter, at least 53% of small businesses cite inflation as one of the biggest challenges they are facing right now. However, concerns may be leveling off; the percentage citing inflation as the top concern has held steady at 52-54% since Q4 2022.

53%
of small businesses cite inflation as one of the biggest challenges they are facing right now
53%
of small businesses cite inflation as one of the biggest challenges they are facing right now
Gauge showing 61.3 for the Small Business Index
Q4 2023 SBI:61.3
The MetLife and U.S. Chamber of Commerce Small Business Index score for Q4 is 61.3. The Q3 Index score was 69.2.

Small businesses' second biggest concern is revenue with 22% citing this as a top concern. Meanwhile, small businesses' concerns about supply chain issues are slightly fading. Supply chain issues are tied for fourth place as the most challenging issue reported among small businesses this quarter (17%), along with affording employee benefits or healthcare.

Nearly half of small businesses report searching for, recruiting, or interviewing new talent in 2023—a significant increase from mid-2021. Most of those looking for new employees say it is hard finding candidates with the experience or skills they need. More also say it is hard to find enough candidates to fill open positions versus a few years ago. Nearly half of those who report searching for new talent in 2023 say it is hard to offer competitive pay and benefits. In fact, 60% of all small businesses agree it is challenging to keep up with existing employees' salary expectations.

In response, small business owners are getting innovative in their struggle to find and retain talent. The most popular strategy is offering flexible work schedules, with 68% of small businesses saying they plan to offer it in the next year. Roughly half (48%) also say they plan to offer a hybrid or remote work environment in the next year to attract new talent. Both incentives are particularly popular among those in the professional services sector. In addition, half (50%) of small businesses say they will be offering increased pay, paid sick leave, or listing the hourly pay/salary range for each open position they announce.

To help alleviate staffing constraints, small businesses are interested in recruiting workers from overlooked groups. Nearly three in four (71%) small businesses agree that employers should more often consider hiring from overlooked talent pools such as formerly-incarcerated people, veterans, military spouses, or legal immigrants. In addition, a majority (54%) of small businesses think the U.S. should issue more skilled worker visas annually so businesses can hire the workers they need.

71%
of small businesses agree that employers should more often consider hiring from overlooked talent pools
71%
of small businesses agree that employers should more often consider hiring from overlooked talent pools

Small Business Index Score 2020 Q1 - 2023 Q4

Small Business Index Score 2020 Q1 - 2023 Q4 line graph
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Index Highlights

The MetLife and U.S. Chamber of Commerce Small Business Index score for Q4 is 61.3. The Q3 Index score was 69.2.

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Index score declines.

The MetLife & U.S. Chamber of Commerce Small Business Index fell to 61.3 from 69.2 last quarter. This is close to overall sentiments this time last year.
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Views of the economy decline to levels seen earlier this year.

25% of small businesses say the U.S. economy is in good health, down eight percentage points from last quarter, but similar to readings from late 2022 and early 2023.
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Views of the local economy drop.

30% of small businesses say their local economy is in good health, down eight percentage points since Q3, returning to levels earlier this year.
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Inflation remains the top challenge—by far.

A majority of small businesses (53%) say inflation is the top challenge facing the small business community. This is the sixth quarter in a row where 50% or more have cited inflation as their biggest challenge.
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Most small businesses say there is a worker shortage.

A majority (53%) of small businesses agree there is a worker shortage in their local area.
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More small businesses are looking for workers.

45% of small businesses say they have searched for new talent this year, up from 36% who said so in fall 2021.
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Most small businesses struggle to find workers with the right experience and skills.

Over half of those who have searched for talent in 2023 say it is hard to find candidates with the experience (54%) or skills (52%) their business needs.
Learn more
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A strong majority report planning to offer flexible work options.

Nearly seven in ten (68%) small businesses say they plan to offer more flexible working hours over the next year to attract new talent. Also, 48% say they plan to offer a hybrid or remote working environment.
Learn more
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Most small businesses find it hard keeping up with salary demands.

A majority of small businesses (60%) say it is challenging to keep up with their employees' salary expectations or demands, in line with attitudes from last quarter (56%).
Learn more
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Most feel small businesses should consider workers from overlooked groups.

71% of small businesses agree that employers should more often consider hiring from overlooked talent pools, such as formerly-incarcerated people, veterans, military spouses, or legal immigrants.
Learn more
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Most small businesses think there should be more visas for skilled legal immigrants.

A majority (54%) of small businesses think the U.S. should issue more skilled worker visas each year so businesses can hire the workers they need.
Learn more
#

Index score declines.

The MetLife & U.S. Chamber of Commerce Small Business Index fell to 61.3 from 69.2 last quarter. This is close to overall sentiments this time last year.
Learn more
#

Views of the economy decline to levels seen earlier this year.

25% of small businesses say the U.S. economy is in good health, down eight percentage points from last quarter, but similar to readings from late 2022 and early 2023.
Learn more
#

Views of the local economy drop.

30% of small businesses say their local economy is in good health, down eight percentage points since Q3, returning to levels earlier this year.
Learn more
#

Inflation remains the top challenge—by far.

A majority of small businesses (53%) say inflation is the top challenge facing the small business community. This is the sixth quarter in a row where 50% or more have cited inflation as their biggest challenge.
Learn more
#

Most small businesses say there is a worker shortage.

A majority (53%) of small businesses agree there is a worker shortage in their local area.
Learn more
#

More small businesses are looking for workers.

45% of small businesses say they have searched for new talent this year, up from 36% who said so in fall 2021.
Learn more
#

Most small businesses struggle to find workers with the right experience and skills.

Over half of those who have searched for talent in 2023 say it is hard to find candidates with the experience (54%) or skills (52%) their business needs.
Learn more
#

A strong majority report planning to offer flexible work options.

Nearly seven in ten (68%) small businesses say they plan to offer more flexible working hours over the next year to attract new talent. Also, 48% say they plan to offer a hybrid or remote working environment.
Learn more
#

Most small businesses find it hard keeping up with salary demands.

A majority of small businesses (60%) say it is challenging to keep up with their employees' salary expectations or demands, in line with attitudes from last quarter (56%).
Learn more
#

Most feel small businesses should consider workers from overlooked groups.

71% of small businesses agree that employers should more often consider hiring from overlooked talent pools, such as formerly-incarcerated people, veterans, military spouses, or legal immigrants.
Learn more
#

Most small businesses think there should be more visas for skilled legal immigrants.

A majority (54%) of small businesses think the U.S. should issue more skilled worker visas each year so businesses can hire the workers they need.
Learn more