WASHINGTON, D.C. (OBV) – There’s a small boost in confidence among small businesses across the nation, but many owners say inflation is impacting their operations.
The MetLife & U.S. Chamber of Commerce Q2 2025 Small Business Index rose to 65.2, an increase from Q1’s 62.3.
The increase reflects optimism around business health and cash flow, but the survey, which was conducted between April 16–May 5, also shows that undercurrents of economic uncertainty still linger, according to U.S. Chamber of Commerce officials.
The Small Business Index is below the levels it reached in 2024’s last three quarters. U.S. Chamber officials attribute that to a sharp decline in Q1 2025.
Small business owners are less concerned about inflation — 48 percent compared to last quarter’s 58 percent — but 70 percent say rising prices have significantly impacted their operations. Among those small business owners, 60 percent raised prices in the past year because of inflation
And other concerns have been weighing down on small businesses.
Forty percent of small businesses — up from last Q1’s 33 percent — spent more time completing licensing, compliance or other government requirements.
“Small businesses are cautiously navigating a complex economic landscape,” said Tom Sullivan, Senior Vice President of Small Business Policy at the U.S. Chamber of Commerce. “While they are confident in their business operations—especially at the local level—when it comes to long term planning there is some hesitation as inflation concerns linger, and new trade policies create economic uncertainty.”
The survey shows that small business owners foresee increasing their staff in the next year — an increase from last quarter’s 37 percent. However, fewer — 65 percent, down from 73 percent last year — are expecting revenue growth in the year ahead.
The following findings from the survey signal growing uncertainty:
- Supply Chain Disruptions: 47 percent of small businesses altered their supply chains in the past six months, and 30 percent said they were unable to meet customer demand due to these disruptions.
- Growing Concern Around Workforce Issues: While concern for inflation dropped, more small business owners — 16 percent, up from 11 percent — say employee retention is their top challenge this quarter. Also, 17 mentioned supply chain concerns, up from 13 percent.
- Generational Difference in Optimism: Businesses in the services sector and those owned by Baby Boomers report lower confidence in both national and local economic conditions. Gen-Z and Millennial owners are more optimistic.
Small business owner Colton McCurley, CEO of National Flooring & Supply Inc. in Sonora, California, told the U.S. Chamber that his clients are still loyal but are more cost-conscious than ever.
“We are managing these headwinds through tight cost controls, vendor renegotiations, and strategic investments in automation and distribution. These adjustments have improved profitability, even amid an unprecedented decline in demand,” says McCurley.
Employers were also asked about employee benefit offerings. Most small business owners responded that offering employee benefits is important, but said they struggle with the complexity and cost of doing so.
The survey found the following concerning employee benefits:
- Nearly All Acknowledge Importance: 93 percent of small businesses say benefits are important for showing care for employees and their families, and around nine in 10 say benefits are key to boosting morale, productivity and retention.
- Health Insurance Leads: Health insurance remains the most commonly offered benefit, followed by various forms of paid leave. Overall, 70 percent of small businesses offer at least one type of benefit.
- Barriers to Offering Benefits: Limited budgets (40 percent) and rising costs (37 percent) are the top barriers. Only 11 percent of small businesses report no barriers to offering benefits.
“Today’s small business owners are navigating a complex benefits landscape that’s only grown more challenging in recent years. It’s no surprise that an increasing number, two in three, say they wish they had outside help,” said Bradd Chignoli, executive vice president and head of Regional Business & Workforce Engagement. “Partners such as benefits brokers and insurers are excellent resources to meet this challenge. By working with knowledgeable experts, small business owners can focus on their top priority: growing their business.”
