Small Business Confidence Rises as Uncertainty Lingers – U.S. Chamber of Commerce

MetLife & U.S. Chamber of Commerce Small Business Index Q2 2025 Report

Overview and Economic Context

The MetLife & U.S. Chamber of Commerce Small Business Index for Q2 2025 registered a slight increase to 65.2, up from 62.3 in Q1. This rise indicates growing optimism regarding business health and cash flow among small businesses. However, the survey also highlights ongoing economic uncertainties affecting the sector.

Key Economic Challenges and Sustainable Development Goals (SDGs) Implications

Despite reduced inflation concerns (48% this quarter, down from 58% previously), 70% of small businesses report significant operational impacts due to rising prices, with 60% having increased prices in response. Additionally, 40% of small businesses spent more time on licensing, compliance, or government requirements, up from 33% last quarter.

These challenges relate closely to several SDGs, including:

• SDG 8: Decent Work and Economic Growth – Small businesses’ cautious navigation of economic complexities impacts sustainable economic growth and employment.
• SDG 9: Industry, Innovation, and Infrastructure – Increased regulatory and compliance burdens affect industrial innovation and infrastructure development.
• SDG 12: Responsible Consumption and Production – Price adjustments and supply chain disruptions influence sustainable consumption patterns.

Findings Signal Persistent, Growing Uncertainty

Survey data collected from April 16 to May 5 reveals mixed outlooks among small businesses:

1. Staffing Expectations: 42% of small businesses plan to increase staff within the next year, consistent with last year’s 41%.
2. Revenue Growth Projections: Anticipated revenue increases have declined to 65%, down from 73% a year ago.

Additional Challenges Impacting Small Businesses

• Supply Chain Disruptions: Nearly 47% of small businesses have modified supply chains recently, with 30% unable to meet customer demand due to these disruptions.
• Workforce Concerns: Employee retention has become a growing challenge, cited by 16% of owners (up from 11%). Supply chain issues also remain a top concern for 17%, up from 13% in Q1.

These challenges intersect with:

• SDG 8: Decent Work and Economic Growth – Workforce retention and employment stability are critical for economic development.
• SDG 9: Industry, Innovation, and Infrastructure – Supply chain resilience is essential for sustainable industrialization.

Business Adaptation Strategies

Colton McCurley, CEO of National Flooring & Supply Inc., reports managing economic headwinds through:

• Tight cost controls
• Vendor renegotiations
• Strategic investments in automation and distribution

These measures have enhanced profitability despite reduced demand, aligning with:

• SDG 8 by promoting sustainable economic growth
• SDG 9 through innovation and infrastructure investment

Employee Benefits: Cost and Complexity Challenges

The Q2 2025 survey also explored small businesses’ employee benefit offerings, revealing key insights:

• Importance of Benefits: 93% of small businesses recognize benefits as vital for demonstrating care for employees and their families, boosting morale, productivity, and retention.
• Most Common Benefits: Health insurance is the most frequently offered benefit, followed by various paid leave options.
• Barriers to Offering Benefits: Limited budgets (40%) and rising costs (37%) are primary obstacles; only 11% report no barriers.

These findings relate to:

• SDG 3: Good Health and Well-being – Access to health benefits supports employee health.
• SDG 8: Decent Work and Economic Growth – Employee benefits contribute to decent work conditions and economic stability.

Conclusion

The Q2 2025 Small Business Index reflects cautious optimism amid persistent economic challenges. Small businesses are adapting through strategic management and innovation while facing ongoing concerns related to inflation, workforce retention, supply chain disruptions, and employee benefits. These dynamics underscore the importance of supporting small businesses to achieve the Sustainable Development Goals, particularly SDGs 3, 8, 9, and 12.

Explore the Research

For further details and historical data, visit the MetLife & U.S. Chamber of Commerce Small Business Index.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 8: Decent Work and Economic Growth
   • Focus on small business optimism, employment growth, revenue expectations, and economic uncertainty.
2. SDG 9: Industry, Innovation and Infrastructure
   • References to supply chain disruptions, automation, and strategic investments.
3. SDG 3: Good Health and Well-being
   • Importance of employee health insurance and benefits for well-being.
4. SDG 10: Reduced Inequalities
   • Challenges small businesses face with employee benefits and economic barriers.

2. Specific Targets Under Those SDGs Identified

1. SDG 8: Decent Work and Economic Growth
   • Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation.
   • Target 8.5: Achieve full and productive employment and decent work for all.
2. SDG 9: Industry, Innovation and Infrastructure
   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and GDP.
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies.
3. SDG 3: Good Health and Well-being
   • Target 3.8: Achieve universal health coverage, including financial risk protection and access to quality essential health-care services.
4. SDG 10: Reduced Inequalities
   • Target 10.2: Empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.

3. Indicators Mentioned or Implied to Measure Progress

1. For SDG 8
   • Percentage of small businesses expecting to increase staff (42%).
   • Percentage of small businesses anticipating revenue increases (65%).
   • Percentage of small businesses reporting inflation impact and price increases.
   • Percentage of small businesses spending more time on licensing and compliance.
2. For SDG 9
   • Percentage of small businesses altering supply chains (47%).
   • Percentage unable to meet customer demand due to supply chain disruptions (30%).
   • Investment in automation and distribution improvements.
3. For SDG 3
   • Percentage of small businesses offering health insurance and other employee benefits.
   • Percentage citing benefits as important for employee well-being (93%).
4. For SDG 10
   • Percentage of small businesses facing barriers to offering benefits (40% limited budgets, 37% rising costs).
   • Percentage of small businesses reporting no barriers (11%).

4. Table of SDGs, Targets and Indicators

Source: uschamber.com