[Thomas M.Sullivan](https://www.uschamber.com/bio/thomas-m-sullivan) Vice President, Small Business Policy, Published December 04, 2023 We track the latest data on the small business outlook so that you don’t have to.Every week, Tom Sullivan analyzes new data from NFIB, Intuit, WSJ/Vistage, and more, to give a weekly economic forecast for small businesses.The Latest Forecast The forecast for this week is partly sunny.Holiday shopping numbers reached all-time-records and since more small retailers sell online, they benefitted from the biggest online shopping spend in American history.What it means: Even though inflation continues to be a strong headwind for small businesses, there are signs that costs are going down.
Strong holiday sales, combined with the fact that more small businesses sell online, are bright spots (sunshine) for small business.Clouds remain on the forecast with the seemingly endless small employer challenge of hiring good employees.Rising federal regulatory costs are also part of the partly cloudy horizon for Main Street.Listen: Tom Sullivan and National Federation of Independent Business (NFIB)’s Holly Wade talk about their small business forecasts on a weekly podcast.[Listen here.](https://anchor.fm/thomas-sullivan04/episodes/Los-Angeles-snowstorm–A-somber-small-biz-economic-outlook-this-week-e1vjnae/a-a9a4i8c) Watch: Catch Tom Sullivan on ASBN (America’s Small Business Network) every month providing the latest small business policy updates, news, and analysis.[Watch here](https://www.asbn.com/small-business-shows/small-business-update-us-chamber-commerce/).
Coming Soon: The next [MetLife & U.S.Chamber Small Business Index](https://www.uschamber.com/sbindex/) release is December 12, 2023.
New Small Business Data [WSJ / Vistage Small Business CEO Confidence Index](https://www.vistage.com/wsj-small-business-index/) (December 1, 2023) Summary: Small businesses are bullish on increased revenue for next year and generally positive despite high inflation and interest rates.- 13% of small business owners say the economy has improved compared to 12-months ago.
40% are neutral and 47% say that the economy has gotten worse over the past year.- 63% of small business owners say interest rates are impacting their business (up 5 points from October).
– Small business views on whether the U.S.is in a recession haven’t changed since last October.11% of small business owners say that a soft landing has occurred (up 2 points from October), 20% are saying we are in a recession (down 2 points), and 39% say the country is approaching a recession (up 1 point from October).
– 57% of small businesses are bullish about expected revenues in the next 12 months.42% believe profitability will improve and 38% believe that profitability will shrink.[National Retail Federation Holiday Weekend Spending Annual Survey ](https://nrf.com/media-center/press-releases/thanksgiving-holiday-weekend-sees-record-number-shoppers)(November 28) Summary: Prosper Insight & Analytics produces NRF’s annual shopping survey.
Black Friday was the top day during a record-breaking 5-day period for holiday shopping.- A record 200.4 million consumers shopped during the 5-day period between Thanksgiving and Cyber-Monday (up 3.7 million from last year).- 4 million more consumers made holiday purchases online this year and 1.3 fewer consumers shopped in-person at retail stores.- 55% of purchases were driven by sales and promotions (up 3 points from 2022).- Black Friday was the most popular of the 5-days for shopping both in-person and online.166.8 million shoppers purchased holiday gifts on the day between Thanksgiving and Small Business Saturday [American Express Small Business Saturday Report](https://www.americanexpress.com/en-us/newsroom/articles/shop-small/us-consumers-report-an-estimated–17-billion-spending-at-small-b.html)(November 27, 2023) Summary: While small businesses benefitted from record spending over the Thanksgiving weekend, purchases on Small Business Saturday dropped by $900 million compared to last year.
– Consumers who were aware of Small Business Saturday spent $17 billion at independent retailers and restaurants on November 25th.- 68% of Small Business Saturday shoppers purchased items in person at stores and 53% of Small Business Saturday online shoppers purchased items from small businesses compared to 34% of those shoppers making online purchases at large retailers.
– 41% of in-person Small Business Saturday shoppers were with family, friends or neighbors during their shopping.[National Federation of Independent Business (NFIB) Small Business Optimism Index](https://strgnfibcom.blob.core.windows.net/nfibcom/SBET-October-2023.pdf) (November 14, 2023) Summary: This week marks the 50-year anniversary of NFIB’s economic survey, but a 3- month slide in small business optimism is a wet blanket on any celebration.Fingers crossed that 4th quarter sales turn things around.- 23% of small business owners rank inflation as their biggest problem (unchanged from September).- -17% of small business owners reported higher sales in the past 3-months (9 points worse than September) and the percentage expecting higher sales improved 3 points to -10%.- 30% of small businesses raised their prices in October (up 1 point from September).- 57% of small business owners reported capital outlays in the last 6-months (unchanged from September) and 24% are planning capital purchases in the next 3-months (unchanged from September).- -43% of business owners are expecting better business conditions (unchanged from September, which was 6 points worse than August).
– 23% of small business owners reported that all their credits needs are met (unchanged from September) and 2% of small business owners reported the opposite (that their credit needs have not been met) (unchanged from September) Read More [SBE Council’s Small Business AI Adoption Survey ](https://sbecouncil.org/wp-content/uploads/2023/10/SBE-Small-Business-AI-Survey-Oct-2023-FINAL.pdf)(October 31, 2023) Summary: No surprise that small businesses are first movers when it comes to AI because AI tools free up time for founders and their teams.- 75% of small businesses utilize AI in their operations, with financial management tools used the most (40%), email marketing automation ranking 2nd (32%).
– The top 5 AI providers used by small businesses are Google (51%), Microsoft (39%), ChatGPT (37%), Adobe (30%), and QuickBooks/Intuit (29%).- Small businesses average $1,800 annual investment in AI-powered tools.- 83% of small business owners expect to invest in AI for their business operations over the next year, with 31% expecting significant investment.- 82% of small business owners find AI tools effective in running and growing their businesses.- 93% of small business owners believe that AI tools are cost-effective and improve profitability.- 76% of small business owners describe the use of AI tools as time-savers, freeing up an average of 13 hours a week.
– 85% of small business owners believe government must balance regulation and innovation when it comes to trying to address risks posed by AI.[Most Risky and Least Risky Cities for Small Business](https://www.forbes.com/advisor/business-insurance/most-risky-cities-for-small-business/) (September 27, 2023) Summary: Analysis of GDP growth rate, state taxes, and crime rates makes for interesting findings.- Texas claims 8 of the top 15 cities to start a business and California hosts 8 of the worst 15 cities for small business.- Plano, TX rests atop the cities most favorable for small business, Laredo, TX is number two, and Raleigh, NC gets the bronze.
[MetLife & Small Business Index for Q3](https://www.uschamber.com/sbindex/summary) (September 20, 2023) Summary: An uptick in feelings about the local and national economy bodes well for small business owners.- Index score is 63.1 (up 6.1 points from Q2 of this year).This highest level is mostly attributed to a 9-point increase in small businesses’ comfort with their current cash flow and a 6-point increase in how they rate their overall business health.- While more small businesses are negative about the U.S.
economy (43%) than positive (33%), the intensity of negativity is lessening (14 points lower than last quarter).- 52% of small business owners rank inflation costs as top concern (down 2 points from last quarter and 7 consecutive quarters as top concern) and when asked about inflationary pressures, small business owners are primarily worried about wage hikes (56%).- 42% of small businesses plan on increasing investment over the next 12-months (unchanged from last quarter) and 40% of small businesses plan on adding staff (down 7 points from last quarter’s 5-year-high).- 71% of small businesses plan on increased revenues in the next 12-months (unchanged from last quarter’s record-high).- 70% of small businesses report that rising interest rates are limiting their ability to raise capital (down 6 points from last quarter).- Twice as many small businesses view employee retention as a top challenge comparted to 2-years ago (15% vs.7% if Q3 2021).
– 70% of small business owners are prioritizing the mental health of their employees (up from 60% in Q3 2021).- 89% of small business owners believe their family-like atmosphere helps retain employees and 82% believe the direct connection between owners and employees gives small businesses an advantage when it comes to hiring and keeping good employees.Explore More Small Business Data The MetLife & Small Business Index is released quarterly to deliver a comprehensive quantitative snapshot of the small business sector and explore small business owners’ perspectives on the latest economic and business trends.
About the authors Thomas M.Sullivan Thomas M.Sullivan is vice president of small business policy at the .Working with chambers of commerce and the U.S.
Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship.He runs the U.S..
