The economy gives and the economy takes. During economic expansions, many businesses and individuals thrive. However, once the economy starts to contract, it often means hard times all around. And right now, Main Street business owners are worrying that a recession may loom on the horizon.
A CNBC SurveyMonkey Small Business survey covering the second quarter (2022) found that roughly eight in 10 small business owners believe the economy will enter a recession this year. Inflation has been the biggest concern on Main Street as labor and product costs continue to rise. The survey found, however, that small business owners were reluctant to raise prices, since doing might drive away customers.
Still, as of the second quarter, 36 percent of small business owners reported that business was good. Another 46 percent said that current conditions were "middling," while just 18 percent reported that business was "bad." Over 40 percent of business owners also think that their business will enjoy growing revenues over the next 12 months, while 35 percent expect to hold steady.
The survey also found that over 60 percent of businesses planned to keep staffing levels the same, while only 14 percent expected to cut workers. If the economy does start to contract, however, more businesses will struggle through hard times and may end up cutting payrolls.
It's not just Main Street that's worried about a contraction either. Deutsche Bank, Bank of America and others warn that a recession is likely. Goldman Sachs is a bit more optimistic, arguing that a recession might be avoided. Regardless, the bank notes that these are very challenging times. Many bankers have cited interest rate hikes as a major contributor to rising recession risks.
