Q3 2021 Small Business Confidence Index holds steady at a score of 45, the same index score from Q2 and down 8 points from Q3 2020
ENGLEWOOD CLIFFS, N.J. and SAN MATEO, CA, August 10, 2021 — CNBC, First in Business Worldwide, and Momentive (formerly SurveyMonkey), a leader in agile experience management, today announced the results of their quarterly CNBC/Momentive Small Business Survey.
The third quarter survey finds small business owners grappling with higher costs and supply disruptions, and struggling to find qualified employees to fill increasingly more open jobs. Nearly one third (31%) of small business owners say they have open positions that they've been unable to fill for three months or more, up from 24% in Q2 2021 and 16% in pre-pandemic Q1 2020. Seventy percent of small business owners say they are experiencing rising supply costs, 39% of whom say they have had to raise their prices as a result. Thirty-eight percent of those experiencing higher costs say they are planning to raise prices if costs continue to increase.
The survey, which was conducted from July 26-August 3, 2021, found small business owners divided on the impact of the surging delta variant of COVID-19 on their businesses, with 41% of them saying the spread of the new variant won't change the outlook for their businesses for the rest of the year. Thirty-seven percent say delta will change their outlook "a little" and 19% say it will change it "a lot." Almost a third of small business owners (32%) in the arts, entertainment, and recreation industry say the delta variant is causing them to change their business outlook "a lot," the most of any industry.
Despite what appears to be multiple headwinds, overall small business confidence was unchanged compared to a quarter ago. The Small Business Confidence Index held steady at 45 out of 100. The index is below 50 for the fourth straight quarter. A number below 50 indicates more small business owners are pessimistic than are optimistic about their companies' future. Thirty-six percent of small business owners describe overall business conditions as "good," up two points from Q2 2021.
"Broad economic indicators have pointed to accelerating growth, which make these tepid confidence numbers a bit of a wake-up-call," said Momentive Chief Research Officer, Jon Cohen. "Concerns about rising costs and being unable to fill empty positions are particularly challenging for small businesses and could point to more gloomy quarters ahead, particularly with unknowns around the delta variant."
Each quarter, CNBC and Momentive poll over 2,000 small business owners aiming to measure the vitality of the American economy as well as the view from Main Street on jobs, taxes, and other hot topics. In addition to measuring small business confidence nationwide, the large sample size gives CNBC and Momentive the power to uncover trends by geographic region and among specific small business cohorts.
Additional key findings from the Q3 2021 CNBC/Momentive Small Business Survey include:
Help wanted: Labor shortage worries continue to weigh on small business owners:
- 50% of small business owners say it's harder to find qualified people to hire compared to a year ago.
- 41% of small business owners say they are currently experiencing a rising cost in wages.
- 32% of small business owners say they've offered higher wages to try to find qualified workers, 27% have created flexible offers and 24% have highlighted on-the-job training in their efforts to fill open roles.
Supply chain issues:
- 55% of small business owners say they are currently experiencing supply chain disruptions.
- Among small business owners who are experiencing supply chain disruptions, nearly half (46%) say the most significant consequence is an inability to meet customer demand, followed by 34% who cite higher overall input costs and 15% who point to an inability to repair or maintain property or equipment.
Cybersecurity concerns (or lack thereof):
- Despite recent surges in ransomware attacks on businesses of all sizes, 56% of small business owners are not concerned that their business will be the victim of a cyber attack in the next 12 months. 29% are "somewhat concerned" and 13% are "very concerned."
- 59% of small business owners say they are confident in their ability to resolve a cyber attack on their businesses, though only 28% say they have a plan to follow in the event of an attack, and only 26% have cybersecurity insurance.
- 22% of small business owners are spending more on cybersecurity now than they were a year ago.
CNBC Small Business Reporter Kate Rogers will reveal the results of the CNBC/Momentive Small Business Survey today, Tuesday, August 10th, throughout CNBC's Business Day programming. For more information on the survey including the full results and methodology and in-depth articles, go to: https://www.surveymonkey.com/curiosity/cnbc-small-business-q3-2021/.
Momentive created a unique Small Business Confidence Index (SBCI), which is a 100-point score based on responses to eight key questions. The index is calculated on a scale from 0–100 and is based on the responses to eight key questions. A zero indicates no confidence, and a score of 100 indicates perfect confidence. The third quarter of 2021′s SBCI has stayed the same as the second quarter this year at a score of 45.
This CNBC/Momentive online poll was conducted July 26 - August 3, 2021 among a national sample of 2,081 self-identified small business owners ages 18 and up. This quarter, we also reached 10,556 individuals who do not own small businesses. Respondents for this survey were selected from the more than 2 million people who take surveys on the Momentive platform each day. The modeled error estimate for this survey is plus or minus 3.5 percentage points for the results among small business owners and 1.5 percentage points for results among those who do not own small businesses.
Data for small business statistics have been weighted according to business characteristics (industry and number of employees) according to the Small Business Administration's 2013 Statistics of U.S. Businesses. Additionally, person-level data (age, gender, level of education, race, geography) for business owners have been weighted to the Census Bureau's 2012 Survey of Business Owners.
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