Across the United States, ongoing fears that the economy may still be running too hot remain elevated, with most Main Street small- to medium-sized businesses (SMBs) fearing the worst.
The “Main Street Health Q1 2023: Using Finance to Ease Recession Fears” report by PYMNTS sheds light on how these small business owners are adjusting their economic predictions for the upcoming year, while identifying the primary challenges they perceive in sustaining their operations both now and in the face of a potential economic downturn. The study is based on a survey of more than 500 SMBs with physical stores located in commercial areas across the U.S.
Per the results from the joint PYMNTS-Enigma study, nearly 60% of Main Street SMBs foresee the economy entering a recession within the next 12 months. And although this figure has decreased by 7.8% from the 64% that held such expectations in October, it remains a significant share.
Among these SMBs, those in the Main Street retail sector display higher levels of pessimism. Specifically, 65% of them anticipate entering a recession within the next year — the highest share compared to other segments including professional services, personal and consumer services and the construction sector.
Conversely, SMBs operating in the food, entertainment and hospitality sector emerged the most optimistic across sectors. But even within this group, the majority (54%) foresee a recession within the next 12 months, further underscoring widespread concerns driving economic anxiety among Main Street SMBs.
Drilling down into the data further revealed that over 64% of Main Street SMBs generating annual revenues between $150,000 and $1 million expect the economy to enter a recession in the next 12 months. This is higher than the 57.7% recorded for small businesses with less than $150,000 in annual revenues.
Even most businesses generating between $1 million and $10 million in annual revenue are not free from concern. According to the report, 55% of that group see stormy days ahead and predict the start of a recession in the next 12 months.
