A majority of small business owners are concerned that the state of the economy will drive them to close their doors.
Nearly two-thirds, 64%, of small business owners said they were concerned that economic conditions could force them to close, according to the May edition of the Job Creators Network Foundation’s (JCNF) Small Business IQ Poll. Two of the top concerns among small business owners are the rate of inflation and upheaval in the banking sector.
“While the plague of inflation has largely fallen out of the headlines, concern among small business owners about rising prices has hit a two-year peak. Now, pile on banking instability and the threat it poses to accessing credit, and the U.S. small business community is uneasy,” foundation president Elaine Parker said in a statement.
Parker touted the Job Creators Network’s American Small Business Prosperity Plan, which calls for a series of reforms, including making former President Donald Trump’s tax cuts permanent and cutting government spending, to “supercharge Main Street.”
“Passing the Prove It Act would be a good first step. The bill — introduced by Sen. Joni Ernst in May — would help address the federal regulatory burden strangling our country’s small business job creators,” Parker said.
The poll is a national survey of 400 small business employers conducted between May 5-30. Responses were received through randomly distributed invitations online. The poll’s margin of error is 4.9% with a 95% confidence interval.
Concerns about the economy have risen over the past several months after hitting 57% in February. The high in the past year hit in November and December at 65%.
A majority of small business owners, 66%, reported being “very” or “somewhat” concerned about rising interest rates and how that could impact their access to loans. And 71% of small business owners reported being “very” or “somewhat” concerned about new banking regulations.
The failures of Signature Bank, Silicon Valley Bank, and First Republic Bank earlier this year sent a tremor through regional banks as investors worried about the safety and stability of their own accounts.
The string of bank failures is the worst since the Great Recession in 2008. The assets of those three banks, worth $532 billion, are worth more, when adjusted for inflation, than the assets of the 25 banks that failed in 2008.
In addition to the bank failures, inflation continues to burn hot over the Federal Reserve’s 2% target rate. The annualized inflation rate rose at 4% in May, according to data released Tuesday by the Bureau of Labor Statistics.