Small business owners across the US have expressed growing concerns over economic and governmental uncertainties, as well as rising cost pressures, according to a recent report by the National Federation of Independent Business (NFIB). The report highlights the evolving challenges faced by small businesses in 2024 compared to previous years.

One of the most significant findings is the increased importance of ‘uncertainty over economic conditions’ and ‘uncertainty over government actions.’ These issues have risen sharply in priority since 2020. ‘Uncertainty over economic conditions’ is now ranked as the third most severe problem, up from ninth place in 2020, with 22 per cent of small business owners identifying it as critical. Similarly, ‘uncertainty over government actions’ has moved up to eighth place and is considered critical by 23 per cent of business owners, as per the Small Business Problems and Priorities report.

The challenge of ‘locating qualified employees’ remains a pressing issue, ranking fifth overall and deemed critical by 28 per cent of respondents. This ongoing difficulty underscores the labour market pressures that small businesses continue to face.

Cost pressures remain a significant and persistent concern. The ‘cost of health insurance’ continues to be the number one chronic issue for small business owners, unchanged since 1986. The ‘cost of supplies and inventories’ has surged in importance, moving from 12th place in 2020 to the second most severe issue in 2024. This shift is largely attributed to the historic inflation seen over the past two years, with 20 per cent of owners now finding it a critical problem, up from 9 per cent in 2020.

Energy-related costs also feature prominently among the top concerns. The ‘cost of natural gas, propane, gasoline, diesel, fuel oil’ is ranked as the sixth most severe problem, with nearly one in four business owners reporting it as critical. Additionally, ‘electricity costs (rates)’ has become a significant issue, ranking 10th in 2024, and is considered critical by 16 per cent of respondents.

Another issue that has grown in importance is ‘interest rates,’ which has seen a dramatic rise in concern, moving from 56th place in 2020 to 13th in 2024. This reflects the impact of rising interest rates on small businesses, which are often more sensitive to changes in borrowing costs.

Tax-related concerns continue to be significant for small business owners, with two of the top ten problems being tax-related. The most severe tax issue is ‘federal taxes on business income,’ which ranks fourth overall, down one position from 2020. Despite the benefits of the Tax Cuts and Jobs Act for many small businesses, a quarter of small business owners still consider the federal tax burden a critical problem, an increase of five percentage points from four years ago. The potential expiration of the Small Business Deduction at the end of 2025 could exacerbate this issue, leading to a significant tax hike for small businesses.

‘State taxes on business income’ also remains a key concern, ranking as the second most severe tax issue. Twenty-two per cent of respondents report it as critical, up from 19 per cent in 2020.

Fibre2Fashion News Desk (DP)