Small business owners felt mostly optimistic during the holiday season, even as concerns over high interest rates held back economic confidence in the last months of 2023.
According to the National Federation of Independent Business (NFIB), 88% of small business owners surveyed during the fourth quarter of 2023 cited interest rates as their primary obstacle to financing their operations. The number represents a dramatic increase from the start of Q3 when only 58% of entrepreneurs felt the same way. However, the extent to which businesses were impacted by interest rate increases varied between the NFIB’s research participants. Roughly one-fifth of respondents felt their companies were placed at a significant advantage due to the Federal Reserve’s consistent rate hikes, while the remaining business owners reported moderate to mild impacts.
Nevertheless, small business owners still felt mostly optimistic toward the holiday season entering into December. More than half (55%) of the NFIB’s research participants held moderate expectations for the holidays, while 26% were confident that the final weeks of 2023 would result in higher sales and profits. Only 20% of surveyed entrepreneurs were pessimistic entering the holiday season.
And while current levels of optimism and economic difficulties remain less favorable than pre-pandemic norms, small business owners still feel mostly confident in the future of their enterprises. Roughly 56% of NFIB survey participants said their organizations were in a good financial position, while 35% rated their performance as okay. Only 8% felt their companies were in a difficult spot at the end of 2023.