Small- and Medium-Sized Business Report: Q3 2023

Report summary

Small-and-medium-sized business are feeling considerably less optimistic in Q3. With a smaller share reporting sales growth, inflation still a challenge and financing more difficult to come by, the positive picture painted by our Q2 sounding of the SMB mood is looking more like a blip in a negative trend.

Key Takeaways

  • Both reported and projected sales growth shrank in Q3, as did the share of SMBs that are expecting business conditions to improve. Inflation remains the most cited challenge facing SMBs.
  • Fewer SMBs are reporting easier access to loans this quarter, while a rising share expect it to become harder to obtain financing in the coming quarter.
  • Cost pressures are relatively unchanged from last quarter but remain elevated, while a rising share of SMBs are reporting stronger pricing power.
  • Finding qualified employees remains the second most-cited challenge in Q3 behind inflation, with SMB headcount growth on cooling down in recent months.
  • Heading into the holiday season, a plurality of SMBs are reporting sufficient inventories, but the share planning to add to their stock in the next three months ticked higher to 25%.

About the authors

A headshot photograph of John Leer
John Leer
Chief Economist

John Leer leads Morning Consult’s global economic research, overseeing the company’s economic data collection, validation and analysis. He is an authority on the effects of consumer preferences, expectations and experiences on purchasing patterns, prices and employment.

John continues to advance scholarship in the field of economics, recently partnering with researchers at the Federal Reserve Bank of Cleveland to design a new approach to measuring consumers’ inflation expectations.

This novel approach, now known as the Indirect Consumer Inflation Expectations measure, leverages Morning Consult’s high-frequency survey data to capture unique insights into consumers’ expectations for future inflation.

Prior to Morning Consult, John worked for Promontory Financial Group, offering strategic solutions to financial services firms on matters including credit risk modeling and management, corporate governance, and compliance risk management.

He earned a bachelor’s degree in economics and philosophy with honors from Georgetown University and a master’s degree in economics and management studies (MEMS) from Humboldt University in Berlin. 

His analysis has been cited in The New York Times, The Wall Street Journal, Reuters, The Washington Post, The Economist and more.

Follow him on Twitter @JohnCLeer. For speaking opportunities and booking requests, please email [email protected]

A headshot photograph of Jesse Wheeler
Jesse Wheeler
Senior Economist

Jesse Wheeler previously worked at Morning Consult as a senior economist.

A headshot photograph of Akber Khan
Akber Khan

Akber Khan is an economist at decision intelligence company Morning Consult, where he supports the research efforts of the Economic Intelligence team by applying a combination of data science, data engineering and econometric forecasting methods to deliver insights into global macroeconomic trends. Previously, he worked for the Federal Reserve Board as a financial analyst, covering issues such as banking and finance, short-term funding markets, and monetary policy. He received a bachelor’s degree in economics from Bentley University.

Follow him on Twitter @AKhanMC. For speaking opportunities and booking requests, please email [email protected]