In the same survey a year ago, when increased vaccinations promised to end the COVID-19 pandemic, companies were more optimistic, with 67% saying the US was on the right track. That changed in the latest release, with 61% of respondents saying the US was on the wrong track.
About 78% of small business owners said the economy had deteriorated in the past three months, while only 5% said it had improved. During the same period, 84% said employment problems had worsened, and 80% said inflationary pressures had increased.
This quarterly survey is the first time a question about the recession has arisen. The survey found that 6% of those surveyed are not at all worried about a recession, while 1% said they don’t know.
Supply chain issues have worsened in the past three months for 38% of respondents, while 40% said such issues remained the same.
Joe Wall, who heads Goldman’s Small Business Training Program, said one of the “most worrying data” in the survey was that 38% of small businesses said they had seen a drop in customer demand as a result of higher prices for goods and services. .
The findings will prompt discussions at the program’s summit in Washington next week, where more than 2,500 small business owners are expected to meet with more than 400 government officials.
Focus on cost
Jill Pomaretto, founder and owner of Ethel’s Baking Co near Detroit, has been struggling to keep up with rising costs at her 30-employee company, which makes gluten-free candy bars sold at Whole Foods and other grocery chains.
She told Reuters that butter prices have more than doubled, salaries have risen 30%, packaging and shipping costs have risen dramatically and she now has to keep a double stockpile of ingredients to avoid production disruptions that “eat cash”.
said Pomaretto, who founded Ethel in 2011 and is a Goldman member.
“I haven’t had a conversation with another small business owner in the past two weeks that this wasn’t the biggest topic – like, how are we going to get through this?” She said.
Its plan is to “manage micro-costs”, conduct daily risk assessments, carefully select customer relationships to avoid over-expansion, and diversify the product line into biscuits.
Despite the bleak outlook on macroeconomic challenges, 65% of US business owners said they remain optimistic about their own business prospects, and 65% said they currently employ full-time or part-time employees.
The survey is based on responses from 1,533 participants in the Goldman Sachs 10,000 Small Business conducted by Babson College and David Bender Research from June 20-23.
One of the changes companies are pushing for is the reauthorization and modernization of the Small Business Administration — the federal agency that supports businesses with loan guarantees and technical advice — a move that hasn’t happened in 20 years.
Pommarito said the changes are needed to make it easier for banks to approve SBA loans, making them “more attractive” for banks to lend to small businesses.
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