Small business owners are growing more uneasy about the economy. The latest U.S. Chamber Small Business Index for the first quarter shows confidence declined for the second straight quarter—another sign that uncertainty is starting to weigh on decision-making.
The Chamber says this “signals growing unease about the economic outlook amid rising inflation pressures and broader uncertainty.” It adds that, even though the overall score is higher than it was at the same time last year, the Chamber says, “The underlying data point to a sharper deterioration in sentiment—particularly around the national economy, inflation, and future investment and hiring.”
Chamber EVP, Chief Policy Officer, and Head of Strategic Advocacy Neil Bradley says the survey “suggests small business owners are worried about the future state of the economy, but it remains to be seen if this will translate into changes in their current operations.”
How Owners View Their Own Businesses
There is one brighter spot in the data—69% of small business owners rate their companies as in good health. This compares with only 28% saying the U.S. economy is in good health. And while 35% report their local economies are healthy, that’s down 10 points from last quarter.
Plans for Hiring and Investment
Reflecting those concerns, fewer small business owners plan to expand their payrolls or make new investments this year:
- 37%expect to increase investment, down from 44% last quarter
- 30%expect to increase staff, a 12-point drop from Q4 2025
- 61%expect increased revenue, slipping from 65% last quarter and 69% a year ago
The Chamber says this “pullback in expectations underscores concerns that economic uncertainty is beginning to weigh on growth decisions—an early warning sign for broader economic momentum.”
Top Concerns
The report shows that inflation is the top challenge facing small businesses, with 53% citing it as their biggest concern—up from 45% last quarter. For more than four years now, inflation has been the top challenge cited by small business owners.
And concerns about the cost of employee benefits are on the rise—19% of business owners cite affording employee benefits or health care as a top challenge—the highest level recorded since tracking began in 2023.
Taken together, the data suggest a growing disconnect: Small business owners still feel relatively confident about their own companies, but far less certain about the broader economy. If that uncertainty continues, it could start to influence the very decisions—hiring, investment, and expansion—that drive small business growth.
Photo courtesy Getty Images for Unsplash+
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
