Small Business Outlook: Economy, inflation, impact, growth

Thomas M. Sullivan
Senior Vice President, Small Business Policy, U.S. Chamber of Commerce

Updated

May 12, 2025

Published

November 25, 2024

Economic uncertainty abounds on Main Street and small business growth plans stall past this summer.

Tariffs are having a real and devastating impact on thousands of small businesses across the nation as uncertainty, rising costs, and cancellations are hitting home. To help thousands of small businesses navigate the challenges, the U.S. Chamber has been answering questions, holding briefings, sharing resources, and lobbying on their behalf.

Learn more: U.S. Chamber to Administration: Small Businesses Need Immediate Relief from Tariffs

ICYMI: The Q1 2025 MetLife and U.S. Chamber Small Business Index is live. Find the latest data on small business confidence, top challenges, and a special section on workforce readiness insights.

This Week's Highlights

Uncertainty continues to dampen small employers’ outlook and small business owners see growth opportunities 6-months from now.
More small businesses are confident about their finances than not, but uncertainty is clouding Main Street’s outlook and plans for growth have slowed.

New Small Business Data

National Small Business Association (NSBA) Small Business Economic Report (May 7, 2025)

Summary: More small business owners are confident in their financial future than not, but the percentage hits a low point because of economic uncertainty.

40% of small business owners report that the economy is the same or better than 6-months ago and 49% of small business owners believe the economy is the same or better than 12-months ago.
51% of small business owners anticipate a recession in the next 12-months (4 points lower than 2024’s report) and 27% anticipate an economic expansion (2 points lower than 2024).
59% of small business owners are confident in the financial future of their business (lowest point in survey’s 16-year history).
Three times as many small business owners (31%) expect growth opportunities in 6 to 12 months as those who expect growth within the next 3-months (10%).
Economic uncertainty tops the list of small business growth challenges (59%) compared to U.S. political instability (36%), decline in customer spending (33%), inflation (26%), tariffs on foreign goods (22%), and lack of available capital (19%).
58% of small business owners increased employee compensation over the past year and 31% expect to add employees this year.
49% of small business owners are expecting increased revenues this year and 30% expect revenues to drop.
50% of small businesses do not have outstanding loans and of those getting loans, 60% secured adequate financing. 23% were turned down for a loan or line of credit.

Fiserv Small Business Index (May 5, 2025)

Summary: The rise in small business sales slows down, but remain positive.

Month-over-month sales at small businesses in April rose 0.4% from March and year-over-year sales at small businesses rose 3.2% compared to April 2024.

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National Federation of Independent Business (NFIB) April Jobs Report (May 1, 2025)

Summary: Small business owners curb their hiring enthusiasm because of economic uncertainty.

34% of small businesses reported job openings they could not fill in April (6 points lower than March and lowest percentage in 3 years).
56% of small businesses hired or tried to hire in March (3 points higher than March). Of those hiring, 85% of those hiring reported few or no qualified job applicants (down 2 points from March).
13% of small business owners are planning to create new jobs in the next 3-months (1 point higher than March).
33% of small businesses raised wages in April (down 5 points from March) and 17% plan on raising compensation in the next 3 months (down 2 points from March and the lowest percentage in 3 years).
29% of small businesses have openings for skilled workers (down 4 points from March) and 13% have openings for unskilled workers (unchanged for past 3 months).
57% of small businesses in construction have a job opening they can’t fill (1 point higher than March).

WSJ / Vistage Small Business CEO Confidence Index (April 25, 2025)

Summary: Small business outlook on the economy continues downward slide with a greater percentage of Main Street employers worried about the negative impact of tariffs.

14% of small business owners say the economy has improved (7 points lower than March) and 57% say the economy has gotten worse (15 points worse than March and 43 points worse since January).
25% of small business owners believe the economy will improve in the next 12 months (2 points lower than March) and 56% believe the economy will worsen (13 points worse than March).
36% of small businesses plan on increasing employees this year (12 points lower than March).
30% of small businesses are expecting to increase fixed investments in the next 12 months (6 points lower than March).
45% of small businesses expect increased revenues in the next 12 months (14 points lower than March) and 27% believe revenues will decrease (13 points worse than March).
36% of small business owners believe profitability will increase in the next 12 months (11 points lower than March) and 35% believe that profitability will decrease (13 points power than March).
7% of small business owners believe that across-the-board tariffs will have a positive impact on their business (1 point lower than March). 72% believe tariffs will have a negative impact (8 points higher than March).

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2025 Economic Preview: A Year of Productivity-Driven Growth

Summary: More and more small business owners are embracing AI adoption.

58% of small business owners are actively deploying AI tools in their business. 82% of those who are using AI have adopted the technology in the last 2-years and 35% started using AI in the past year.
96% of small business owners who have deployed AI in their businesses intend to continue their investments and 70% plan on increasing their investment in AI.
The most common small business usage of AI is content writing and creation (43%) followed by image creation and presentations (36%) and e-mail automation (36%).
82% of small business owners believe that leadership on AI is essential to the future

Small Business Fast Facts

Small Business Data Center

Summary: Confidence of local economy remains steady as uncertainty pushes other small business perceptions downward and plans for growth on Main Street stall.

29% of small business owners are positive about the nation’s economic health (3 points lower than last quarter).
37% of small business owners are positive about the health of their local economy (1 point lower than last quarter and 1 point lower than this time last year).
58% of small business owners rank inflation as their top concern (3 points higher than last quarter and the 13^th consecutive quarter where inflation tops the list).
35% of small business owners rank revenue as their biggest challenge (10 points higher than last quarter and highest percentage in 4-years).
63% of small businesses are confident in the health of their own business (4 points lower than last quarter) and 66% are comfortable with their current cash flow (6 points lower than last quarter).
20% of small businesses increased staff over the past year (2 points lower than last quarter).
94% of small business owners say that trade schools or technical colleges do a good job preparing new employees to enter the workforce. 72% say the same for colleges and universities and 51% say that high school does a good job preparing students for jobs.
63% of small business owners are more likely to hire an entry-level employee if they have internship or work-study experience.
67% of small business owners offer flexible working hours to attract talent and pay transparency ranks second (62%) in offerings by small employers to recruit good workers followed by higher pay (55%), paid sick leave (55%) and employee referrals (50%).

Honoring America's Top Small Businesses

The Results Are In. These Are America's Top 100 Small Businesses

Looking for More Small Business Insights?

Watch Tom Sullivan talk all things small business with Jim Fitzpatrick on ASBN (America's Small Business Network), including the latest news and policy updates for Main Street business owners. New episodes are added every month so that you can watch them anytime.

Small Business Forecast: The Podcast

The U.S. Chamber of Commerce's Tom Sullivan and National Federation of Independent Business's Holly Wade summarize what’s going on with small businesses and provide their forecast every week on the Small Business Forecast: The Podcast.

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From Main Street

About the author

Thomas M. Sullivan

Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.