The External Link2023 Report on Employer Firms, the first report from the 2022 External LinkSmall Business Credit Survey (SBCS), shows promising signs of post-pandemic recovery as well as areas of concern.
Nationally, small businesses employ nearly half of all employees, and have created about two-thirds of the jobs added to the economy in the past 25 years. Locally, they increase opportunities to reinvest in their communities, provide needed services, and build community leadership. Understanding small business conditions can help strengthen local and national economies.
Each fall, the Federal Reserve conducts a survey of small businesses with less than 500 employees. The 12 Reserve Banks administer the survey in partnership with more than 400 small business organizations. This nationally representative survey provides insight into the changing segments of the small business market, financing needs and credit outcomes, and topics such as disaster recovery and labor demand. Additional reports on survey themes will be published throughout the year.
The External Link2023 Report on Employer Firms shows promising signs that some small business trends are returning to pre-pandemic norms. For the first time since the onset of the pandemic, surveyed firms were more likely to report that revenues and employment levels increased in the past 12 months. The percentage of firms reporting profitable operations also rose substantially year-over-year.
Firms did, however, show signs of continuing uncertainty. Expectations of revenue and employment growth over the coming year are down compared to pre-pandemic levels. Financial and operational challenges were also noted, ranging from managing rising costs, covering operating costs, and maintaining staffing levels.
These top-line findings hint at the insights and data provided by the survey. The full reports are available on the External LinkFed Small Business website along with details of the survey methodology, access to the underlying data, and how to become a partner in the survey process.