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Small Firms See Business Conditions Fading in U.S. as Prices Soar

Small Firms See Business Conditions Fading in U.S. as Prices Soar

High inflation has taken a toll on local business conditions in the U.S., according to a survey by from Capital One and the NextGen Chamber of Commerce.

A majority of U.S. small firms, 55%, saw local conditions as fair or poor in late March, up from 42% in December and 39% last June, based on the survey of 1,200 businesses with annual revenue of less than $20 million. The report defines business conditions as including inflation, unemployment and regulations.

The findings confirm recent data showing that decades-high inflation has become the biggest challenge for business owners. The NFIB Small Business Optimism index dropped in March for the third month in a row. And small businesses shed 120,000 jobs in April, while larger companies increased their payrolls, according to ADP Research Institute figures released Wednesday.

Small Firms See Business Conditions Fading in U.S. as Prices Soar

Still, the survey also finds that entrepreneurs are looking up despite the deteriorating business environment. Nine in ten owners expressed confidence they’ll be operating in the next six months, and more than three-quarters say they’ll be able to fill openings.

The NextGen chamber is a business group supporting U.S. entrepreneurs under the age of 40. The survey, in partnership with polling firm Morning Consult, was conducted March 25 to March 30.

©2022 Bloomberg L.P.