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Economic confidence amongst small business owners hits highest level since Biden took office

Even within the face of stubborn inflation, small business owners are striking a more positive tone. Optimism surrounding the economy is rising and the CNBC|SurveyMonkey Small Business Confidence Index reached its highest level since President Joe Biden took office, in response to the newest quarterly data released on Thursday morning.

Twenty-eight percent of small business owners describe the present state of the economy as “excellent” or “good,” up five percentage points from the prior quarter and up from 18% 12 months over 12 months, in response to the CNBC|SurveyMonkey Small Business Survey for Q1 2024. It’s probably the most optimistic respondents to the survey have been since CNBC and SurveyMonkey began asking this query in Q2 of 2022.

The Small Business Confidence Index reading of 47 out of 100 marked the best reading since Joe Biden took office in the primary quarter of 2021.

A recent string of knowledge has found consumers and small business owners starting to indicate more confidence in regards to the economy, whilst challenges linger.

“We’re form of seeing a possible turn across the corner when it comes to small business optimism,” said Sam Gutierrez, senior research scientist at SurveyMonkey, pointing to an uptick in survey responses about economic strength and the overall direction within the fight against inflation after two years of stagnation on this survey data.

The Q1 survey was conducted online from January 22 to February 1, 2024, amongst a national sample of three,119 self-identified small business owners ages 18 and up using SurveyMonkey’s methodology

Inflation — which has proven to be stubborn based on probably the most recent data whilst significant progress has been made in bringing prices down from a peak level — continues to weigh on owners, with nearly a 3rd saying it’s currently the largest risk to business. That is greater than double the quantity who cite consumer demand, rates of interest, labor shortages and provide chain disruptions as key issues.

“Inflation remains to be top of mind,” Gutierrez said. “But we’re seeing this cautious optimism on inflation, and costs basically.”

Confidence within the Fed to manage inflation is now at 35% amongst small business owners, the best it has been because the starting of 2022. The percentage of business owners (29%) who say inflation has peaked, while it stays a minority of the survey audience, can also be at its highest level because the starting of 2022.

Inflation is a component of how owners surveyed say they may evaluate candidates for the 2024 election, with 60% of small business owners reporting inflation and rates of interest are their top issue in terms of deciding who to vote for in November, together with economic growth (60%), followed by tax policy (51%). 

Inflation woes have hit John Morman’s small business, Celtic Tides, over the course of the last 12 months. Morman imports and sells items from Wales, Ireland and Scotland, including kilts, jewelry and more. The Lexington, Virginia-based business just celebrated its twenty fifth anniversary.

John Morman and his wife Mary Jo run Celtic Tides, a small retailer in Lexington, VA, selling imported items from Wales, Ireland and Scotland.

John and Mary Jo Morman

“When you cope with an imported item, rising costs hit us from several directions. The cost of international freight has risen. The cost of the items which might be made within the places we buy our products from, their costs have all increased, the worth of the dollar has dropped,” he told CNBC, adding that his costs have gone up by as much as 15% but he has passed on lower than half of that to the patron. 

“We hold off on price increases, absolutely, as best we are able to. But inevitably, a few of those costs do must be passed on,” he said. 

Right now, Morman’s top concern is a scarcity of consumer spending, though he’s feeling on the entire that this 12 months shall be higher than the last.

“It’s been a really strange 12 months to this point. There have been times when normally we could be busy and we have not been, and times once we would normally expect to be quiet and we have been busy, so the 12 months to this point is lagging behind last 12 months. So as a community we’re, as I say, we’re a bit of concerned,” Morman said. “I feel there remains to be numerous concern over rising costs.”

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