Majority of Main Street Businesses Are Preparing for a Downturn in the Economy
October 18 2022 - 9:30AM
Business Wire
The CBIZ Main Street Index found while 81% of
small and mid-sized business owners report a negative view of the
economy, most believe they can confront the upcoming challenges
CBIZ, Inc. (NYSE: CBZ), a leading provider of financial,
insurance and advisory services, has released the Q4 2022 CBIZ Main
Street Index, which takes the pulse of and gauges the outlook for
small and mid-sized businesses (SMBs). The results reveal the
majority of business owners expect a recession to affect their
operations in the coming months but remain optimistic about their
ability to navigate the changing environment.
The CBIZ Business Confidence Study, a weighted average of
responses to the Index’s business confidence-focused questions,
rose nearly seven points from the second to third quarter to a
score of 67. The Index showed while four in five business owners
expect a recession, 71% remain positive in their ability to respond
to a downturn. Most businesses continue to combat multiple
challenges brought on by the pandemic and labor market conditions,
including 75% which experienced a staffing shortage of some
kind.
The Index, which was conducted between September 12 and
September 30, analyzed responses from more than 1,100 Main Street
businesses with fewer than 100 employees in 27 industries across
the U.S.* The index assesses a range of timely trends, including
business sentiment, staffing needs, areas of growth and decline,
and adapting to a changing workplace.
“Despite the expectation of a recession, small to mid-sized
businesses have seen increased profits and revenues, leading to
increased confidence,” said Anna Rathbun, Chief Investment Officer
of CBIZ Investment Advisory Services. “Main Street has shown to be
resilient in the face of conditions produced by the pandemic,
notably inflation. Our data shows these companies are now preparing
to weather a potential downturn in the economy.”
The data was assessed from an overall perspective, as well as
based on company size, region and industry. An interactive
infographic with the results is available on the CBIZ website. Key
findings include:
- 81% of businesses are expecting and preparing for a downturn
in the economy - Reflecting the general lack of confidence in
the current U.S. economy, SMBs report a negative view of the
nation’s business landscape. 47% of businesses are preparing by
reviewing and reducing spending and more than one in five (23%)
have instituted hiring freezes.
- Business Confidence Study remains high despite challenging
economic times - Despite rising interest rates and persistently
high inflation, which have increased the cost of doing business,
71% of respondents indicated their confidence level remains
positive, including 31% who report a “very positive” outlook. In
Q2, only 64% of businesses stated they had at least a positive
outlook.
- Inflation is the greatest concern for small to mid-sized
businesses - While the issue of inflation comes first in the
list of concerns (76%), the lack of an ‘adequate number of skilled
workers’ and the likely possibility of a recession fall closely
behind. As a result, 58% of businesses have increased costs by
passing them down to customers and another 57% have implemented
cost controls.
- 62% of companies are impacted by employee turnover,
resignations - Almost two in three companies say they’re
affected by employee departures in this tight labor market. 14%
reported that steady turnover had a major impact on their
organization, while 22% indicated it had a moderate impact. In an
effort to retain talent, 44% say they’ve opted to revamp and
enhance their compensation and health benefits packages. 22% of
SMBs have turned to technology to improve efficiency in light of
staffing issues.
- 23% of SMBs still report major staffing shortages -
Almost ¼ of businesses surveyed say they continue to suffer major
staffing shortages, while another 30% say the inability to hire
enough workers is having a moderate impact on business performance.
This is an improvement from Q2, when a combined 62% of small to
mid-sized businesses reported experiencing at least a moderate
impact from worker shortages.
Rathbun added, “The increase of employee turnover is forcing
SMBs to take more action to retain their talent. Our survey shows
this is a common theme among small to mid-sized businesses and will
likely persist despite possible layoffs in some sectors brought on
by a recession.”
*Note: Not all those surveyed in the CBIZ Main Street Index are
clients of CBIZ.
About CBIZ
CBIZ, Inc. provides professional business services that help
clients better manage their finances and employees. CBIZ provides
its clients with financial services, including accounting, tax,
financial advisory, government health care consulting, risk
advisory, real estate consulting and valuation services. Employee
services include employee benefits consulting, property and
casualty insurance, retirement plan consulting, payroll, life
insurance, HR consulting and executive recruitment. As one of the
largest accounting, insurance brokerage and valuation companies in
the United States, the Company’s services are provided through more
than 100 Company offices in 33 states. For more information, visit
www.cbiz.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20221018005285/en/
Media Contact Rocco Aloe Gregory FCA for CBIZ, Inc.
CBIZ@GregoryFCA.com 610-860-2075
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