Small- and Medium-Sized Business Report: Q4 2023

Report summary

Small-and-medium-sized businesses are feeling much more optimistic in Q4. Sales growth notably rebounded relative to Q3, and companies are increasing hiring and planning on increasing investment as stronger economic conditions and easier access to financing are expected to prevail next quarter and beyond.

Key Takeaways

  • Reported and projected sales growth rebounded in Q4, as did the share of SMBs that are expecting business conditions to improve. Inflation remains the most-cited challenge facing SMBs.
  • More SMBs reported easier access to loans and financing this quarter and expect conditions to ease further in Q1 2024. More SMBs also plan to increase investment in various categories in the coming quarter.
  • Cost pressures eased last quarter, and more SMBs expect costs for a variety of inputs to remain the same or decrease in the coming quarter. While SMB pricing power increased, companies expect to keep the pace of price increases steady.
  • Difficulty finding qualified employees fell from No. 2 to No. 3 in terms of the biggest challenges facing businesses, with SMBs increasing headcount over Q4 and an increasing share plan to continue expanding through the next quarter.
  • A majority of SMBs reported adequate inventory levels, though the share reporting a surplus increased slightly. Nevertheless, the share of SMBs planning to add to inventories in the next 3 months increased relative to Q3.

About the authors

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]