Research
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Summary & Highlights

Index Reaches Pandemic-Era High, as Many See Brighter Future

Three business women looking at a laptop screen.

The MetLife & U.S. Chamber of Commerce Small Business Index reaches a pandemic-era high this quarter as many small businesses report seeing a brighter future. As they begin to catch a glimpse of a post-pandemic world, small business owners are showing higher optimism for the year ahead, especially when it comes to their staffing and investment plans. However, while expectations for the future are higher, concerns about increasing inflation, supply chain constraints, and talent shortages show things are a long way from returning to normal.

This quarter’s Small Business Index score is 63.0, the highest score since the start of the pandemic. This score is up from last quarter’s score of 56.6 and the nadir of the pandemic in 2020 Q2 when the score reached a record low of 39.5. The survey—conducted between October 13 – 27, 2021 as COVID-19 cases began receding nationally—reflects both higher optimism about next year and slightly better outlooks on overall business health. However, small business owners’ sentiment and the Index score have fluctuated more than usual throughout 2021, indicating that small businesses continue to face uncertainty as they try to navigate the evolving pandemic situation and plan for the future.

Hiring and investment plans, in particular, reveal small businesses’ growing optimism. About two in five (38%) small business owners say they plan to increase staffing levels, while 42% say they plan to invest in their business in the coming year—increases of 10 and 13 percentage points, respectively, from 2021 Q3.

As small businesses face the future, they see many challenges. A quarter (26%) of small business owners say the biggest challenge they expect to face in a post-pandemic world is revenue, with inflation (23%) and COVID-19 compliance (21%) seen as other top issues.

26%
of small business owners say the biggest challenge they expect to face in a post-pandemic world is revenue.
26%
of small business owners say the biggest challenge they expect to face in a post-pandemic world is revenue.
Gauge showing 63.0 for the Small Business Index
Q4 2021 SBI:63.0
This quarter’s Small Business Index score is 63.0, the highest score since the start of the pandemic. This score is up from last quarter’s score of 56.6 and the nadir of the pandemic in 2020 Q2 when the score reached a record low of 39.5.

Most small businesses say inflation is a concern and that their most common way of dealing with inflation is raising the prices they charge customers. Three in four (74%) small business owners are concerned about the impact of inflation on their business, and about as many (71%) say rising prices have had a significant impact on their business in the past year. Those who feel the impact of rising prices see this impact most on the costs of goods and supplies (62%). To manage higher costs caused by inflation, three in five (63%) small businesses say they have increased the prices of their products or services in the past year. Although raising prices is popular, nearly half (45%) have taken out a loan, while 41% say they have decreased staff.

Most small businesses say their supply chains have been disrupted by the pandemic and worker shortages. Sixty-one percent of small businesses say the COVID-19 pandemic has dramatically disrupted their supply chain and 55% say worker shortages have done the same. As a result, 63% say they have had to alter their supply chains in the past six months and nearly half (47%) say these disruptions make it difficult to keep up with customer demand.

Small Business Index Score 2018 Q1 - 2021 Q4

Small Business Index Score 2018 Q1 - 2021 Q4 Chart

A strong majority of small businesses see the holiday season as important for their bottom line, but persistent labor shortages and supply chain issues cloud the picture. Seven in ten (70%) say the upcoming holiday season is important for their business’ yearly profits. This quarter, almost half (46%) of small businesses say they have faced a worker shortage, and 60% expect supply chain disruptions to make managing the holiday season difficult.

While an increase in the SBI score reflects increased optimism, small business owners’ sentiments have fluctuated from quarter to quarter throughout 2021. This indicates that small business owners, while more optimistic, are doing their best to navigate an ever-changing situation.

Two restaurant workers having a discussion over a computer.

Index Highlights

The MetLife and U.S. Chamber of Commerce Small Business Index score for Q4 is 63.0. The Index score for Q3 2021 was 56.6. In Q2 2020 it reached an all-time low of 39.5.1

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Index rises to pandemic-era high.

The MetLife & U.S. Chamber of Commerce Small Business Index rose to 63.0 this quarter. This score remains below findings before the pandemic, but is the highest since the pandemic began in Q1 2020 (when the score was 71.7).
Learn more
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A strong majority are optimistic about the future.

As 2021 comes to a close, 77% of small business owners say they are optimistic about the future of their business.
Learn more
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Small businesses report record intent to hire next year.

In a movement sure to impact an already-tight labor pool, 38% of small businesses anticipate increasing their headcount next year, an increase from last quarter (28%) and the highest mark for this measure since the SBI launched in Q2 2017.
Learn more
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More small businesses plan to increase investment in 2022.

About two in five (42%) small business owners say they plan to increase investment in the coming year, up 13 percentage points from 2021 Q3. This is also the highest level since the SBI began in 2017.
Learn more
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Small businesses see revenue and inflation as their biggest challenges, post-pandemic.

26% of small businesses say the biggest challenge they expect in a post-pandemic world is revenue, with inflation (23%) and COVID-19 compliance (21%) also seen as top-tier issues.
Learn more
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Most small businesses are concerned about the impact of inflation.

Three in four (74%) small business owners are concerned about the impact of inflation on their business. Similarly, 71% say rising prices had a significant impact on their business in the past year.
Learn more
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Increasing prices for goods and services is seen as the best way to deal with inflation.

To manage higher costs caused by inflation, three in five (63%) small businesses say they have increased the prices of their products or services in the past year.
Learn more
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Taking out loans and reducing headcount are less popular ways to deal with inflation.

Over two in five small businesses say they have taken out a loan in the past year (45%) or have decreased staff (41%) as a way of managing higher costs due to inflation.
Learn more
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Small business owners say their supply chains have been disrupted by the pandemic and worker shortages.

61% of small businesses say the COVID-19 pandemic has dramatically disrupted their supply chain, and 55% say worker shortages have done the same.
Learn more
#

Index rises to pandemic-era high.

The MetLife & U.S. Chamber of Commerce Small Business Index rose to 63.0 this quarter. This score remains below findings before the pandemic, but is the highest since the pandemic began in Q1 2020 (when the score was 71.7).
Learn more
#

A strong majority are optimistic about the future.

As 2021 comes to a close, 77% of small business owners say they are optimistic about the future of their business.
Learn more
#

Small businesses report record intent to hire next year.

In a movement sure to impact an already-tight labor pool, 38% of small businesses anticipate increasing their headcount next year, an increase from last quarter (28%) and the highest mark for this measure since the SBI launched in Q2 2017.
Learn more
#

More small businesses plan to increase investment in 2022.

About two in five (42%) small business owners say they plan to increase investment in the coming year, up 13 percentage points from 2021 Q3. This is also the highest level since the SBI began in 2017.
Learn more
#

Small businesses see revenue and inflation as their biggest challenges, post-pandemic.

26% of small businesses say the biggest challenge they expect in a post-pandemic world is revenue, with inflation (23%) and COVID-19 compliance (21%) also seen as top-tier issues.
Learn more
#

Most small businesses are concerned about the impact of inflation.

Three in four (74%) small business owners are concerned about the impact of inflation on their business. Similarly, 71% say rising prices had a significant impact on their business in the past year.
Learn more
#

Increasing prices for goods and services is seen as the best way to deal with inflation.

To manage higher costs caused by inflation, three in five (63%) small businesses say they have increased the prices of their products or services in the past year.
Learn more
#

Taking out loans and reducing headcount are less popular ways to deal with inflation.

Over two in five small businesses say they have taken out a loan in the past year (45%) or have decreased staff (41%) as a way of managing higher costs due to inflation.
Learn more
#

Small business owners say their supply chains have been disrupted by the pandemic and worker shortages.

61% of small businesses say the COVID-19 pandemic has dramatically disrupted their supply chain, and 55% say worker shortages have done the same.
Learn more
1. Since we moved to monthly (or near-monthly) tracking for much of 2020, the Index ratings for Q2 2020 and Q3 2020 are based on an average of responses from all surveys in that quarter. The Q3 2020 Index was calculated based on 1,100 interviews from the July and September surveys. The Q2 Index was calculated based on 1,500 interviews from the April, May, and June surveys. From Q4 2020 to the present, the Index score was calculated based on a single survey of approximately 750 interviews per quarter. While significant changes in data points from Q1 2020 to the pandemic-era quarters can largely be attributed to the recent economic environment, switching from a phone to online approach may have also generated a mode effect.