Inflationary pressure is too great, and more than 80% of small businesses in the United States are prepared to cope with price increases

Recently, the US small business confidence index is high, reaching the peak since the outbreak of COVID-19. However, many small business operators are suffering from the adverse effects of inflation, and the number of enterprises planning to raise prices has reached an all-time high.

According to the small business index report released last month, more than 70% of small business owners said that the rising cost of goods and services in the past 12 months had a significant impact on their operations. The report is investigated and analyzed quarterly. The time of this investigation is from October 13 to October 27, 2021.

According to the data of the U.S. Department of labor, the CPI of the United States in November 2021 reached or exceeded 5% for seven consecutive months. In November, the CPI increased by 6.8% year-on-year, the largest year-on-year increase since June 1982. At the last interest rate meeting in 2021, the Federal Reserve announced to accelerate the reduction of bond purchase, and the reduction rate doubled.

St. Louis Fed chairman Brad said on Thursday (January 6) that in order to deal with inflation, it is possible to raise interest rates as soon as March and then follow up and reduce the balance sheet. Inflation has become a worry for the Fed.

According to business A survey by org found that 82% of small enterprises need to raise the price of products or services to cope with high inflation. Specifically, about 11% of small businesses reported having to raise prices by 10%, nearly half (44%) of small businesses were prepared to raise prices by 15%, and 45% of small businesses said they were prepared to raise prices by 20%.

image

The survey shows that about 92% of small businesses report that the cost of supply or services has increased since the new crown pandemic, and most (71%) report an increase of at least 20%.

Neil Bradley, chief policy officer of the American Chamber of Commerce, said: “inflation has become a major problem faced by small businesses recently. Revenue is certainly the first concern of small business owners, but their worries about inflation even surpass COVID-19.”

“If these small business owners don’t purchase and guarantee inventory, they will have no goods to sell. In order not to happen, they can only hope to raise the price,” Bradley said

Small enterprises are also struggling with the crisis of supply chain interruption, and 64% of small enterprises say they can’t buy enough products or services. Another 56% said they could not meet the needs of customers, and 43% of small enterprises were forced to completely change their products.

Bradley said that small business owners are really worried that inflationary pressures will continue unabated for a long time. Under the dual influence of severe labor shortage and supply chain crisis, the inflationary pressure in the United States may fall into a vicious circle.

“Small business owners are very worried about the difficulty of recruiting and retaining people. This worry makes them have to raise the wages of employees, which further increases the burden on enterprises. Because the operating costs have increased, the prices of products have to rise accordingly,” Bradley said

According to business According to org, about 60% of small business owners said they were worried about the impact of higher inflation on the financial health of their enterprises. Another 47% reported that since the beginning of the arrogance epidemic, corporate profit margins have decreased due to inflation, and 37% of small businesses said their customers complained about price increases.

Bradley said that many small businesses may still be in the recovery stage, but new problems have arisen. He pointed out: “the difficulties faced by small business owners are different from before. In the early days of the outbreak of COVID-19, they were trapped in the city, the fear of the epidemic and the economic recession caused by the epidemic. Now, the difficulties they face are mainly inflation, labor shortage and supply chain disruption.”

You already voted!

You may also like these