Small Business
June 27, 2024
The MetLife/U.S. Chamber of Commerce Small Business Index for the second quarter recorded its highest score since the beginning of 2020. The index score, which measures small business owners' perceptions of their business operations, environment and expectations, jumped to 69.5 from 62.3 in the previous quarter.
According to the U.S. Chamber of Commerce, small business owners' increased confidence is likely due to growing optimism about the future business environment: Nearly three in four (73%) expect revenue to increase next year, the highest level since the survey began in 2017. Nearly half (46%) expect increased investment next year, up 10 percentage points from the previous quarter (and just 1 percentage point below the all-time high in the fourth quarter of 2022).
“Main Street employers are demonstrating confidence and resilience even as inflation continues,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. “Last quarter's survey showed signs of confidence trending upward as small businesses remain optimistic about their revenues over the next 12 months. Main Street employers' comfort with cash flow remains high, which is a key reason small business owners are confident in their ability to meet customer demand and solve the challenges facing their communities.”
Inflation continues to be the top concern for small business owners, marking the eighth consecutive quarter that more than half of small businesses have cited inflation as their top challenge. Small business perceptions of the national and local economies remained stable from the previous quarter, but both increased by 12 percentage points year-over-year.
“Small business owners' continued adaptability and growing optimism is an inspiring and positive sign for the economy,” said Cynthia Smith, senior vice president of regional operations at MetLife. “As these employers continue to invest in and hire in their businesses, they should take a holistic approach and explore solutions like voluntary benefits that help build company culture and retain top talent.”
Small businesses optimistic about AI's future
This quarter's survey also asked SMBs about their perceptions of artificial intelligence (AI), and they are generally optimistic about the future of AI, with many businesses exploring and implementing AI tools.
Many small business owners believe that hiring employees with AI skills will save them time (71%) and money (67%) in the long run, and they see AI as a skill that will reshape the workforce. Two-thirds of small businesses say they expect AI to change employee roles in the future (65%) or expect to see AI proficiency listed in future job ads (64%). Three-quarters of small businesses (74%) agree that having employees who use AI tools gives them an advantage over competitors.
“I read about 2,000 pages to learn more, tasked my senior team with developing our AI practices internally, and began using AI for lead generation, vendor identification, marketing material development and several other applications,” says Michael Canty, president and CEO of Alloy Precision Technologies Inc. in Mentor, Ohio.
As SMBs become more familiar with AI tools, 40% of SMBs say they have tried various AI tools to suit their needs, and almost half (49%) say they plan to try AI tools in the next 12 months.
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