COVID no longer a major headwind for small businesses: Chamber of Commerce executive VP
Neil Bradley stresses inflation, labor shortages main concerns for small business owners
Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, argued on Tuesday that "a pandemic high" has been reached in terms of small business optimism, but noted that pre-pandemic levels have not yet been reached.
Pointing to data from the fourth quarter’s MetLife and U.S. Chamber of Commerce Small Business Index, Bradley told "Mornings with Maria" in a FOX Business exclusive that COVID is no longer a major headwind for small businesses, but stressed that the majority of small business owners are concerned about the impact of inflation.
The index revealed that small business owners’ optimism around hiring and investment plans led to a pandemic-era high score of 63, which signals a positive shift in owners’ optimism on the future of their businesses, staffing and investments.
According to the poll taken between October 13 and 27, the majority of business owners, 74%, are concerned about the impact of inflation on their business, with 71% saying rising prices have had a significant impact on their business in the past year.
The survey noted that in order to manage higher costs caused by inflation, 63% have increased the prices of their products or services, nearly half have taken out a loan, while 41% said they had to reduce their staff.
Earlier this month it was revealed that consumer prices surged at the fastest pace in nearly four decades in November as Americans paid more for practically everything from groceries to cars to gasoline.
The consumer price index rose 6.8% in November from a year ago, according to the Labor Department, marking the fastest increase since June 1982, when inflation hit 7.1%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.8% in the one-month period from October.
"Inflation has now replaced COVID as the top external concern for small businesses," Bradley told host Maria Bartiromo.
Bradley also noted on Tuesday that small businesses are concerned about the "worker shortage crisis."
Last week it was revealed that U.S. job openings unexpectedly climbed to a near-record high in October, as employers struggled to attract new workers amid the ongoing labor shortage.
The Labor Department said Wednesday there were 11.03 million job openings in October, the highest number of openings since July, when businesses were looking to fill 11.1 million positions. It marked an increase from September when there were an upwardly revised 10.6 million open jobs. Accommodation and food services – one of the industries hit hardest by the pandemic – accounted for a bulk of the job openings jump with 254,000 new available positions.
US HIRING STUMBLES IN NOVEMBER AS ECONOMY ADDS JUST 210,000 JOBS
According to the MetLife and U.S. Chamber of Commerce Small Business survey, even though labor shortages are proving to be challenging, 38% of small business owners plan to hire more workers next year, up from 28% last quarter, and the highest mark for this measure since the Index launched in 2017.
"We have a record number high, both current pandemic and pre-pandemic, of small businesses wanting to hire at 38%, but they can’t find workers to fill those open jobs and they’re increasingly having trouble retaining those workers, echoing what we are seeing in the Department of Labor reports about record-high quits," Bradley told Bartiromo.
He stressed that policymakers in Washington, D.C. "have to start paying attention" to the inflation problem.
"This is what’s negatively impact Main Street and Washington seems to almost be ignoring it," he said on Tuesday.
Bradley argued that the Federal Reserve needs to get "serious about tackling inflation."
He added that the Biden administration's signature Build Back Better spending plan is "going to add to the inflationary pressures."
The spending bill, which passed the House but is stalled in the Senate, costs $1.7 trillion and the Congressional Budget Office predicted it would add $367 billion to the national debt.
"It’s like pouring gasoline on top of a fire and that’s the last thing that businesses on Main Street need," Bradley said.
The White House has defended the legislation, saying it is "fiscally responsible" and will "create jobs, reduce costs, make our country more competitive, and give working people and the middle class a fighting chance."
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Speaking on NBC's "The Tonight Show" on Friday, President Biden said, "There’s been a whole range of things that are in there [the Build Back Better spending bill] that are going to really reduce, essentially the cost of living for people in a reasonable, rational way."
"And, by the way, every single bit of that bill is paid for. No one making less than $400,000 a year will pay an additional cent in taxes as well as it will not increase the deficit one penny," he continued.
Overall, the majority of small businesses, 62%, said in the survey that their businesses are in good health, up from 55% last quarter, while those who say their business is in very good health is 30% now compared to about 20% throughout the year.
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FOX Business’ Megan Henney contributed to this report.