The percentage of small business owners who expect their revenues to increase in the next 12 months has risen slightly from earlier this year despite ongoing economic concerns, according to a report released Wednesday by Bank of America.
Bank of America said its 2022 Women & Minority Business Owner Spotlight report found that 66% of small business owners expect their revenues to grow over the next year. That proportion marks a 2% increase from May and a seven-year high, the report said.
According to Bank of America, 72% of Black and 71% of Hispanic business owners anticipated their revenues increasing over the coming 12 months. Approximately 62% of Asian American and Pacific Islander (AAPI) business owners indicated that they had such expectations, the bank said.
Additionally, nearly two-thirds of women business owners said they expected revenue increases.
Confidence in the local and national economies also rose among small business owners, according to the report. About 48% said they think their local economy will improve, up from 39% earlier in the year. The percentage of small business owners who think the national economy will improve rose to 44% from 31% in May.
The increases in revenue expectations and economic confidence come despite ongoing concerns about inflation, commodities prices, a recession and other key factors.
Three-quarters of small business owners identified inflation as their top concern, the report found. About 69% pointed to commodities prices.
Inflation, as measured by the consumer price index, rose 8.3% in August from the prior year and 0.1% from July, the Labor Department said in mid-September. The personal consumption expenditures index, the Federal Reserve's preferred inflation gauge, also went up, climbing 6.2% in August from a year ago and 0.3% from July, the Commerce Department said.
The Bank of America report found that 88% of small business owners said inflation was currently impacting their business. Meanwhile, 80% said they were still dealing with supply chain issues. On average, they have raised prices more than 9% to offset those factors, according to the report.
In an attempt to lower inflation, the Federal Reserve has raised interest rates multiple times this year, including three back-to-back 75-basis-point hikes. Approximately 65% of small business owners said interest rates were a top concern, according to the report.
Roughly 67% of small business owners said a potential recession was their primary concern, according to the report. However, 77% said their business was equipped to survive one.
The U.S.'s gross domestic product shrank in the first six months of 2022, contracting 1.6% in the first quarter and 0.6% in the second quarter, according to the Bureau of Economic Analysis.
The Bank of America report's survey was conducted online from July 26 to Aug. 17 by Ipsos Public Affairs among more than 1,300 small business owners with annual revenues between $100,000 and $4,999,999 and two to 99 employees. More than 350 Hispanic small business owners, nearly 370 Black business owners and 150 AAPI business owners were also interviewed.