Rising Inflation Dominates Small Business Worries
The MetLife and U.S. Chamber of Commerce Small Business Index survey, conducted in late January, found that 85% of small business owners say they are concerned about the effects of inflation on their business, up from 74% last quarter. Almost half of small business owners, 44%, said they are very concerned about the higher prices.
Additionally, 76% of those surveyed said they are finding it difficult to manage higher costs because of inflation, while about 3 out of 4 owners said higher prices have had a significant effect on their businesses over the past year.
Consumer prices rose 7.5% in the 12 months ending in January, the fastest pace of inflation in four decades and a sizable half percentage point increase from December’s number . Prices rose for a wide range of items, including housing, cars, and groceries.
Inflation has not only grown to soaring highs, but it has also increased at a rapid pace. Just less than a year ago, when the Chamber conducted the same survey, only 16% of small business owners cited inflation as a big concern.
Because of the higher prices, nearly 70% of small businesses report they have had to raise their prices, while 41% of owners said they have had to downsize by decreasing staff in order to cope.