Small and Mid-Sized Businesses Report Rise in Economic Confidence as Interest Rate Concerns Decline
20 Februar 2024 - 2:30PM
Business Wire
The Q1 CBIZ Main Street Index reveals shortage
of skilled workers and potential recession among top issues
CBIZ, Inc. (NYSE: CBZ), a leading provider of financial,
insurance and advisory services, has released the results of its Q1
2024 Main Street Index, taking the pulse of and gauging the outlook
for small and mid-sized businesses (SMBs). Companies reported a
notable positive shift in economic sentiment, with only 33%
reporting concerns about interest rates affecting their bottom
line, compared to 61% in the third quarter of 2023. Still, more
than four in 10 businesses (44%) have some degree of concern about
a recession.
The Index also found labor challenges persist for SMBs. Staffing
concerns accounted for two of the three top issues, with the worry
of having an adequate number of skilled workers on staff (47%)
topping the list and employee retention (39%) the third highest.
Headcounts remained more stable this quarter (63%), compared to Q3
of last year (54%), with businesses reporting fewer hiring freezes
and layoffs. The Index found nearly half of companies remain
focused on enhancing compensation and benefits packages to address
these workforce issues.
“The drop in rates of the 10-year treasury bond and 30-year
fixed rate mortgage, both of which peaked in October, has not only
lessened funding concerns for small and mid-sized businesses but
fears of a recession, as well,” said Anna Rathbun, chief investment
officer of CBIZ Investment Advisory Services. “The only thing the
fall in rates hasn’t solved is the skilled worker problem. Dating
back to the early stages of the pandemic, the Main Street Index has
illustrated a consistent theme of companies hiring and hoarding
labor. However, we’re now at a different stage. These businesses
have enough people on their payroll and, while they may not be
using their staff to full capacity, owners are making a
concentrated effort to retain these employees.”
Based on a survey conducted January 9-26, the Index analyzed
responses from 1,304 businesses with fewer than 100 employees in 31
industries across the U.S.* The Index assesses a range of timely
trends, including business sentiment, areas of growth and decline,
and cash flow.
The data was evaluated from an overall perspective, as well as
based on company size, region and industry. An interactive
infographic with the results is available on the CBIZ website.
Additional key findings include:
- Business confidence rises to its highest level in a
year: The Index’s Business Confidence Study saw its highest
weighted average since the first quarter of 2023, 65.7, a 12-point
rise from Q3 of last year. More businesses reported a drop in labor
costs and prices paid. Additionally, 51% of SMBs stated prices paid
for products and services stabilized this quarter, compared to
nearly 44% in Q3 of last year.
- SMBs taking varied approaches to preparing for economic
downturn: Nearly six in 10 businesses (59.3%) stated they plan
to increase sales efforts to stave off the effect of a potential
recession. Owners say they’re also planning to cut overhead (39%),
increase their cash base (34%) and make efforts to diversify their
client base (32%).
- Businesses feeling less of a burden of borrowing costs:
Fewer businesses (72%) taking out a loan stated they experienced
higher borrowing costs, compared to Q3 of 2023 (78%). Additionally,
compared to the previous Index, 15% more businesses shared that
higher borrowing costs are not impacting their funding needs.
- On AI, positives outweigh the negatives: 31% of SMBs
reported a positive or very positive outlook on the use of
artificial intelligence within their organization, though just 25%
shared they plan to invest in AI tools over the next 12 months.
Just 12% stated they’re concerned or very concerned about the
effects of AI on their business.
About CBIZ
CBIZ, Inc. provides professional business services that help
clients better manage their finances and employees. CBIZ provides
its clients with financial services, including accounting, tax,
financial advisory, government health care consulting, risk
advisory, real estate consulting and valuation services. Employee
services include employee benefits consulting, property and
casualty insurance, retirement plan consulting, payroll, life
insurance, HR consulting and executive recruitment. As one of the
largest accounting, insurance brokerage and valuation companies in
the United States, the Company’s services are provided through more
than 120 Company offices in 33 states. For more information, visit
www.cbiz.com.
*Note: Not all those surveyed in the CBIZ Main Street Index are
clients of CBIZ.
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version on businesswire.com: https://www.businesswire.com/news/home/20240220414718/en/
Media Rocco Aloe Gregory FCA for CBIZ, Inc.
Cbiz@gregoryfca.com 610-860-2075
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