Goldman Sachs: Financial strains driving small-business election decisions

PROVIDENCE – Rising costs and economic uncertainty are top of mind for small-business owners when it comes to who they are backing in the upcoming election, according to a new survey by Goldman Sachs.

Specifically, business owners are backing candidates who pledge to reauthorize the U.S. Small Business Administration, a sentiment shared by more than 80% of those surveyed through Goldman Sachs’ 10,000 Small Businesses Voices program.

The SBA and its support for small businesses is of particular importance given fear of an economic recession, which more than 4 in 10 survey takers believe has already arrived, while another 62% anticipate a recession in the coming year. Many are already feeling the pain of an approaching recession, such as a drop in customer demand (named by 54%) and difficulty raising capital or hikes in borrowing costs (named by 29%).

Inflation continues to add to the financial strains, with more than three-quarters of survey takers experiencing worsening effects from inflation over the last three months. Already, more than two-thirds have raised prices of their goods or services to help offset these economic headwinds, but with that comes new worries. Eight in 10 small-business owners fear they may lose customers to larger competitors who can offer better prices because their size allows them to absorb inflationary cost hikes.

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“Small-business owners continue to be hobbled by inflationary pressures and difficulty in hiring qualified workers – challenges which small-business owners only perceive as becoming worse as larger companies are able to absorb inflationary pressures and offer more-lucrative benefits packages in a way they simply can’t do,” Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices, said in a statement. “Congress must prioritize the reauthorization of the Small Business Administration to put small businesses on stronger footing to compete with larger businesses.”

Small businesses are also struggling to compete with larger firms when it comes to hiring, with nearly three-quarters saying the better pay and benefits that big businesses can offer as a challenge to finding workers. Overall, one-third of small businesses say hiring has gotten harder in the last three months, while nearly 60% are paying more in employee benefits compared with 2021.

The survey reflects results from 1,479 Goldman Sachs 10,000 Small Businesses participants across 47 states, Washington, D.C., and Puerto Rico. Rhode Island-specific data was not available.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.