Survey: Majority of Small Businesses Expecting Recession in 2023
With the new year underway, a new survey highlights the economic outlooks held by small and medium-sized businesses. According to JPMorgan Chase’s 2023 Business Leaders Outlook survey, 61% of small business respondents (defined as businesses with annual revenues between $100,000 and $20 million) stated that they expect a recession to hit this year. Similarly, 65% of mid-sized businesses — those with annual revenues between $20 million and $500 million — said the same.
These recession productions come as many businesses surveyed report continued inflation challenges. In fact, 94% of businesses said inflation had impacted their expenses, including 38% who reported expenses rising more than 11%. Additionally, 45% named inflation among their top challenges for the year ahead. That figure is more than double the 20% who said as much in 2021. As a result of inflation, 68% of small business respondents note that they’ve raised prices on some or all of their goods/services.
Despite the economic outlook and issues with inflation, small businesses ended the year with increased optimism compared to the middle of 2022. Chase’s survey found 72% of businesses feeling optimistic about their company’s prospects compared to 67% in the mid-year survey. Notably, this result nears the 74% recorded pre-pandemic. As for what has business owners so optimistic, 69% anticipate increased revenue and sales in 2023 while 65% say they’re projecting greater profits.
Commenting on the results of the year’s survey, the head of research for JPMorgan Chase Commercial Banking Ginger Chambless stated, “Inflation has been a challenging headwind impacting businesses of all sizes, across all industries. While we have seen some encouraging signs that inflation has started to moderate and should cool over 2023, businesses may still want to consider adjustments to strategies, pricing or product mixes to help weather the storm in the near-term.”
Elsewhere, Chase Business Banking CEO Ben Walter noted, “Following the challenges of the last few years, it’s encouraging to see the resilience of small business owners and leaders. The next economic cycle is always right around the corner, so our role is to help small business owners plan ahead so they can succeed in good times and bad.”
Following a series of challenging years for small businesses, 2023 seems poised to present its own financial obstacles. Nevertheless, resilient business owners appear to be prepared for whatever might lie ahead. While we wait to see whether these economic and business predictions do come to fruition, here’s hoping for the best in 2023 and beyond.