Four in Five Small to Mid-Sized Businesses Expect Revenue to Grow or Hold Steady into Q2
February 21 2023 - 9:30AM
Business Wire
Despite positive outlook, the CBIZ Main Street
Index found recession is the top concern for 61% of businesses
CBIZ, Inc. (NYSE: CBZ), a leading provider of financial,
insurance and advisory services, has released the results of its Q1
2023 Main Street Index, taking the pulse of and gauging the outlook
for small and mid-sized businesses (SMBs). The results showed
companies are preparing for the possibility of recession but remain
optimistic about their near-term future. This includes 81% of small
to mid-sized businesses that project revenue will remain the same
or increase by as much as 10% over the next few months.
The CBIZ Business Confidence Study, a weighted average of
responses to the index’s business confidence-focused questions,
rose slightly to just under 68 points. Ongoing action by the
Federal Reserve to raise interest rates and lower inflation was
also apparent in the index, as 78% of companies incurred a
significant or modest increase in the cost of goods and resources
this quarter, down from 85% in Q4 of 2022. Despite the positive
signs for SMBs, 72% surveyed expect a downturn in the economy in
the near future, while 61% cite a recession as their top concern.
Other top concerns include hiring and maintaining an adequate
number of skilled workers (56%) and rising interest rates
(36%).
“Our data reveals the resilience and adaptability that small
businesses have shown in this uncertain economic environment,” said
Anna Rathbun, chief investment officer of CBIZ Investment Advisory
Services. “Despite potential recessionary indicators and rising
interest rates, most companies are managing to withstand these
headwinds and are prepared for whatever lies ahead. It’s a
testament to the hard work and creativity these business owners are
investing to find solutions for success.”
Based on a survey conducted between Jan. 10 and Feb. 1, the
index analyzed responses from more than 700 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.
The data was evaluated 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:
- Despite economic uncertainty, four in five businesses expect
revenue to remain steady or grow — Eighty-one percent of
businesses say they expect revenue to at least hold steady quarter
over quarter. This includes 19% that project anywhere from a 6% to
10% rise in revenue over the next few months.
- 72% of businesses expect a downturn in the economy;
recession is top concern — While the economy remains robust by
a number of measures, like jobs added to the workforce and the
unemployment rate, a number of other factors point to a possible
slowdown. Nearly three out of four small to mid-sized businesses
expect an economic downturn in the near future, while 61% list
their top concern as a recession.
- Half of SMBs remain impacted by employee turnover,
resignation — Half of small to mid-sized companies report
they’re at least slightly impacted by the rate of resignations and
steady employee turnover within their business. While still
significant, this figure dropped from 62% in Q4 of last year.
Additionally, the second-ranked concern among SMBs is hiring or
maintaining an adequate number of skilled workers, with more than
55% indicating the issue persists.
- While costs for goods, resources and labor are still rising,
fewer businesses report them as an issue compared with last
quarter — Fewer SMBs are reporting rising costs incurred in
their day-to-day work, possibly due to the slowing rates of
year-over-year and month-over-month inflation. Seventy-eight
percent share that they incurred a significant or modest cost
increase for goods and resources this quarter, compared to 85% in
the last quarter of 2022. Almost 76% say labor costs are at least
modestly rising, compared to just under 82% in Q4 of last
year.
- Energy prices continue to cause financial pain for SMBs
— While certain energy costs like heating oil may be less of a
financial burden for some businesses compared to the previous
quarter, six out of 10 say heating, cooling, electricity and
gasoline costs have caused them an increase in overhead this
quarter.
*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 120 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/20230221005247/en/
Media Rocco Aloe Gregory FCA for CBIZ, Inc.
Cbiz@gregoryfca.com 610-860-2075
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