![]() The pace is slower than most central bankers and private sector economists misguidedly predicted when the post-Covid-19 spike first became apparent in spring 2021, but faster than seemed likely in the second half of 2022. What could possibly go wrong? Quite a lot.īut here are 15 reasons for guarded optimism about the political and economic outlook. Economies have been adjusting to Russia’s war in Ukraine. The International Monetary Fund has upgraded its 2023 forecasts. Tim Cook still runs Steve Jobs' 9 a.m.Let’s give two and a half (muted) cheers for the world economy. Sign up now: Get smarter about your money and career with our weekly newsletterīillionaire Jim Koch gave up a six-figure job to launch Sam Adams: 'If you'd rather be rich than happy, you're a sociopath' Nearly one-third of respondents said that weathering the pandemic had given them a stronger sense of resilience to feel prepared to survive any major slump in the economy. Part of the reason for their optimism: the pandemic. In June, 83% of respondents to a previous Kabbage survey said they are concerned about a potential recession, but 80% also said they are confident that their businesses can withstand such a downturn. ![]() Regardless, small business owners appear to be relatively optimistic. economy could fall into another recession.Įxperts have pointed to rising inflation as a potential indicator that a recession could be looming, but economists have mostly been split of late on the issue, though some argue the economy is already in another downturn. While inflation is the economic factor on most business-owners' minds these days, many of them are also preparing for the possibility that the U.S. Others highlighted plans to cut lower-margin goods and services from their offerings to focus on areas of their business that would bring the greatest return on investment. Another 22% of respondents said they plan to negotiate better deals with suppliers in order to lower costs. ![]() Kabbage's survey found that raising prices is the most popular remedy for business owners, with 37% saying that was their plan. In the meantime, small business owners are taking steps to "fine-tune their business practices" to counter the increase in costs, according to Brett Sussman, Kabbage's vice president of sales and marketing. Researchers at Morningstar expect prices to come down by 2023, but that would still mean several more months of businesses and consumers dealing with higher prices goods and services. Federal Reserve tried to tamp down inflation on Wednesday with an interest rate hike announcement, but the central bank still does not expect inflation to fall to its 2% goal until 2025. That inflationary pressure means higher costs for small business owners who then have to make the difficult decision of how much of those costs they can afford to pass on to their customers without risking losing business. economy has seen record-high inflation, with the consumer price index up 8.3% over the past year. And 56% of respondents expect to continue feeling the crunch from inflation through at least the summer of 2023. Seventy-five percent of the 550 small business owners and operators that Kabbage surveyed said inflationary pressure had affected their bottom line over the past year. The reason: Higher cost of goods and a competitive labor market that favors workers have forced small businesses to increase spending to remain competitive, eating into any profits they might have enjoyed from the large overall jump in revenue. However, while revenues grew by 87% over that time, small businesses' profits were almost stagnant during that period, actually dropping by 4%. ![]() The result has been something of a mixed bag: Small business owners nearly doubled their revenues between July 2021 and July 2022, according to a new report from Kabbage, the small business lender owned by American Express. But, more recently, business-owners have had to contend with record inflation driving up the cost of doing business while also making customers think twice about their spending habits.
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