Ask President Joe Biden’s Small Business Administration (SBA) chief how America’s small businesses are doing, and she’ll tell you there’s a “small business boom” underway.
Small business owners “are feeling good,” SBA Administrator Isabel Guzman told NHJournal Tuesday. “There is hope in the economy.”
But ask Granite State small business owners, and you’re likely to get a different response.
“Hell, no!” was restaurant owner Desmond Holman’s answer when asked if business owners like him are feeling good.
“It’s tough out there,” said the owner of Daw Kun Thai restaurant in Manchester. “People just can’t afford to go out and eat.”
Guzman was in the Granite State to visit small businesses and attend the SBA N.H. Small Business Week Awards ceremony in Derry.
“The great thing is that there’s a small business boom happening right now,” Guzman said. “Here in the state, you’ve had nearly 40,000 new business applications [since Biden took office]. Obviously, small businesses have had to get through so much, but their resistance is strong, regardless of the headwinds.”
The chief economist for the National Federation of Independent Businesses (NFIB) also used the word “headwinds” to describe the current economy. Its March 2024 Optimism Index found “small business optimism has reached the lowest level since 2012 as owners continue to manage numerous economic headwinds,” said NFIB Chief Economist Bill Dunkelberg. It’s the 27th consecutive month the index has fallen below the 50-year average.
“Inflation has once again been reported as the top business problem on Main Street, and the labor market has only eased slightly,” Dunkelberg said.
Asked about the NFIB report, Guzman dismissed it as just one of many analyses of current economic sentiment.
“The Wall Street Journal did a study as well that found that it was the highest in two years,” Guzman said. “That study also found that two-thirds of them expect revenues to grow this year.”
Guzman is apparently referring to a recent WSJ survey of economists whose fears of recession have fallen. However, the survey was completed just before the GDP report for the first quarter was released, finding growth was an anemic 1.6 percent, significantly lower than forecast.
Sen. Jeanne Shaheen, who was also at the SBA event, was more circumspect about economic conditions for small businesses.
“We have a lot of support that we need to provide to create an environment where there’s housing. And we are continuing to try to lower inflation and [address the issues of] childcare and workforce. But the success of the small businesses in this room speaks to the 17 million small businesses that have been opened since the Biden administration started,” Shaheen told NHJournal.
So why are small business owners telling the NFIB they’re the most pessimistic they’ve been since the Obama presidency?
“You’ll have to ask the small business owners,” Shaheen replied.
Shaheen hit on an issue frequently mentioned by Granite State business owners, large and small: the lack of housing at a price their workers can afford.
“I agree that the number one issue for our members is inflation,” said NFIB state director Bruce Burke. “It’s not skyrocketing like it once was, but it’s still going up. But the issue of labor — and in particularly affordable workforce housing for workers — is almost tied.”
It’s such a concern that when Justin Sousa, owner of Sousa Signs in Manchester, received his SBA award, he took a moment to urge political leaders to address the problem.
“My message to Washington is please do something about the housing crisis and the cost of housing,” Sousa said. “We have great workers, and we want to pay them well. But they have to have a place to live, a place they can afford.”
The federal Department of Labor announced Tuesday that labor costs rose higher than expected in the first quarter, adding to the headwinds small businesses in low-unemployment states like New Hampshire are facing.
“How are our members handling it? They’re keeping their noses to the grindstone, doing what they have to to survive,” Burke said. “In retail, they’re open fewer hours, they’re even closing down some days, and they’re hiring less staff.”
Consumers aren’t feeling great, either. April’s consumer confidence number dropped Tuesday, and it’s the lowest in nearly two years.
Is this an economy that has small business owners “feeling good?” Not Ken Whitten, who owns Apparel Impact in Hooksett with his son Joseph. They won the “Veteran Owned Business” SBA award Tuesday.
“Gas prices are up. Food prices are up. Everything seems to be up and no sign of coming down,” Whitten said after the awards ceremony. “We do what we can to help, and we just hope and pray that something changes.”
Asked what his message for Washington would be, Whitten paused and then chose his words carefully.
“We need some political, economic intelligence. We don’t seem to have that with the current leadership.”
