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19 min ago

The Grinch factor: Workforce challenges, holiday pressures weigh on small businesses confidence

stores in winter Photo / Renee Cordes The latest quarterly index released by the U.S. Chamber of Commerce shows a drop in confidence among small businesses, partly due to holiday season pressures.
By Renee Cordes

Workforce challenges, holiday pressures and uncertainty sparked by the record 43-day government shutdown this fall are weighing on U.S. small business confidence, according to a barometer released Wednesday.

The latest quarterly report by the U.S. Chamber of Commerce shows an index of 68.4 for the fourth quarter, down from last quarter’s record-high 72.0. Researchers cited small declines in cash-flow comfort and expectations for future investment and revenue.

Despite the dip, the index score remains several points above where it was in the first and second quarters.
 
“Small businesses are showing resilience, even amid uncertainty exacerbated by the longest government shutdown in history, when this survey was in the field,” said Tom Sullivan, senior vice president of small business policy at the Washington, D.C.-based organization.

“Inflation remains the top challenge, and workforce concerns are rising," he added. "At the same time, the holiday season is more important than ever for small businesses’ bottom lines.”

This year, the holiday season is especially vital, with more businesses planning seasonal promotions and extended hours to capture consumer spending, even as inflation forces price hikes. Retail businesses lead the charge, with 91% saying the season is critical for profits. 

Inflation and workforce headaches 

Of the 754 small businesses surveyed in October, 45% cited inflation as their biggest concern, in line with last quarter. 

On the workforce front, 17% pointed to employee retention as a challenge, up from 12% a year ago and 14% say attracting talent is a top concern. That’s more than double last year’s figure of 6%.

Charitable giving remains strong despite the difficulties, with 65% of businesses surveyed planning to donate this holiday season. That's up from 54% last year. 

About the index 

The MetLife and U.S. Chamber of Commerce Small Business Index is part of a multi-year collaboration by MetLife and the U.S. Chamber 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 conducted by Ipsos is designed to take the temperature of the sector, see where small business owners are confident and where the pain points are. 

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