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.

Leave a Reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt and Point.Me Partner for Award Flight Search Integration

With several credit cards, customers can earn points that can then be transferred to various travel programs and redeemed for flights or hotel bookings. Unfortunately, finding and booking the best award travel deals isn't always as straightforward as one might assume. To assist with that, Bilt has unveiled a new integration with Point.Me that will help its rewards members search for award flights on airlines that participate in Bilt's transfer...

Zurp Raises $5 Million for Creator Experience Rewards Credit Card

A FinTech looking to marry credit card rewards with the creator economy has just closed a fresh round of funding. This week, Zurp announced that it had raised $5 million to create a "credit card for experiences." New Form, MAGIC Fund, Launchpad VC, OVO Fund, Darling Ventures, and Animal Capital all participated in the pre-seed fund along with a number of strategic investors. Zurp is a startup looking to create...

U.S. Bank to Launch Business Altitude Connect Credit Card

U.S. Bank is set to expand its small business credit card line-up. Recently, the bank announced the impending launch of the new Business Altitude Connect card. Applications for the new product are expected to open next month. In terms of rewards, Business Altitude Connect cardholders can earn 5x points on hotel and car rentals booked directly in the Rewards Center. Meanwhile, other travel purchases, such as airfare and hotel bookings, will...