Detroit City Wire

Small business owners across the United States are reporting mixed outlooks on the economy, with concerns about tariffs, technology adoption, and consumer spending shaping their expectations for the coming months.

According to recent survey data, only 24% of small business owners believe the economy has improved compared to a year ago, a slight decline from July. Meanwhile, 44% say economic conditions have worsened. Looking ahead, 32% expect improvement in the next year while 35% anticipate further deterioration.

Hiring plans remain steady but cautious. Forty-four percent of businesses plan to increase employees this year—a minor decrease from last month—while 12% intend to reduce staff. Investment intentions show some growth: 35% of small businesses expect to boost fixed investments, up three points from July.

Revenue projections are slightly more optimistic, with 57% expecting increased revenues over the next year and 16% anticipating declines. However, expectations for profitability have dropped; only 43% foresee higher profits in the next twelve months while 25% predict lower profitability.

On policy matters, opinions are divided regarding the One Big Beautiful Bill Act. Thirty-two percent view its impact positively, while nearly a quarter express negative views and another quarter remain uncertain or neutral. Following its passage, almost a quarter of small businesses plan to hire additional workers within a year; similar proportions plan wage increases or equipment purchases.

Tariffs continue to be a major concern for small businesses. Only four percent see across-the-board tariffs as beneficial—a slight increase since July—while over half (54%) expect negative impacts from these measures.

Technology adoption is increasing among small businesses. Fifty-eight percent now use generative AI tools—more than double the rate from two years ago—and most owners (83%) believe technology enhances their competitiveness. For those not using AI, quality issues are cited most frequently as barriers, followed by compliance and cost concerns.

Optimism about economic improvement has risen somewhat since June: thirty-six percent now expect better conditions ahead. However, just sixteen percent think it is a good time to expand operations. Sales performance remains weak; nine percent reported higher sales in recent months—a figure that declined compared to June—while six percent anticipate near-term sales growth.

Labor quality has become the top concern for many owners in July, overtaking inflation and taxes after several months at lower levels. More than one-third report unfilled job openings due to lack of qualified applicants.

Despite these challenges, consumer spending continues to support small businesses overall. Month-over-month sales grew by one percent in July after several months of decline; annual sales rose by over three percent compared with last year’s figures (https://www.fiserv.com/en/about-fiserv/resource-center/fiserv-small-business-index.html).

For more details on these trends:

- The WSJ / Vistage Small Business CEO Survey was published August 19.

- The U.S. Chamber of Commerce Fourth Annual Small Business Technology Survey was released August 18.

- The National Federation of Independent Business (NFIB) July Small Business Optimism Index came out August 12.

- Fiserv's May Small Business Index was published August 4 (https://www.fiserv.com/en/about-fiserv/resource-center/fiserv-small-business-index.html).