Inflation rages. Uncertainty is in the mix as to whether consumers will, or even can, keep spending at the pace that’s been seen in the past several months.
For the small- to medium-sized businesses (SMBs) that line main streets across the United States and power the economy at large, it’s been two years of challenges, where the macro picture is anything but steady.
PYMNTS study “Main Street Health Q3 2022: SMBs Battle Inflation” found that inflation has taken on the highest spot among a varied list of concerns that are top of mind. More than a third of companies surveyed said inflation is the biggest challenge faced so far in 2022, up from less than a quarter of respondents as recently as the beginning of this year.
Most companies have seen their supply costs rise (as suppliers have increased their own prices) and thus have passed along at least some of those increases to their end markets. The chart below shows that the impact is most keenly felt by the construction/utilities and hospitality industries.
It’s no surprise, then, that amid rising input costs — inflation makes everything more expensive, of course — profits should be on the decline. Over half of the more than 400 firms surveyed said they’ve seen operating profits decrease through the past 12 months. It’s a vicious cycle that shows no signs of easing soon.
