Companies of all sizes are pointing to slower business, inflation and profit declines as evidence the economy is heading toward a recession, with some larger companies downsizing their workforce.
Small business owners’ sentiments about the economy in June fell to the lowest point since the Job Creators Network (JCN) began tracking the metric, according to JCN data released Thursday. Business owners across the country are forecasting a recession, with tech companies planning to cut jobs and small businesses reporting declines in demand for their goods and services.
“We’ve seen a definite slowdown in orders in the last few months,” Guy Berkebile, the owner of a sealant adhesives company in Pennsylvania, told the Daily Caller News Foundation.
Berkebile chalked up the decline in orders to the fact that “inflation has taken such a bite out of folks’ take home pay that there’s less demand for our products in the market.”
Small business owner sentiment has decreased every month since March, with respondents reporting inflation as their prime concern, according to JCN.
“We are in a recession, even if the government officially hasn’t announced it yet. Small businesses are on the front lines of our economy so they are the first to know when our economy moves in a certain direction,” JCN President and CEO Alfredo Ortiz told the DCNF.
Inflation reached 9.1% in June, the highest year-over-year increase since 1981.
Everyday operating costs for such businesses have skyrocketed, cutting into margins and forcing owners to raise prices, Timirie Shibley, owner of the Doo-Dah Diner in Wichita, Kansas, told the Daily Caller News Foundation.
“The price we pay for a case of eggs (15 dozen), for example, has gone from $17 to $61, and for a restaurant that goes through 6500 eggs a week, that’s not at all insignificant,” Shibley said. (RELATED: ‘Out-Of-Date’: Biden Responds To Record High Inflation Numbers)
Wages for staff that would lead the market a year ago are just average today, she added.
A standard unit of shampoo cost one pet grooming business in Michigan that preferred to go unnamed between $85 and $95 pre-COVID. Now, the same bottle costs $180, a spokesperson told the DCNF.
Brutal inflation report shows a devastating increase of 9.1.% year-over-year. Bidenflation is wreaking havoc on workers, families & small businesses – a consequence of anti-American energy policy, exorbitant borrowing & printing of money & counterproductive federal regulations.
— Ron DeSantis (@GovRonDeSantis) July 13, 2022
Fully 73% of the small business owners that responded to the JCN survey reported the economy as being only in “fair” or “poor” condition, and 74% have been forced to raise prices. Roughly two-thirds think things are getting worse.
Larger businesses are also forecasting an economic downturn, The Wall Street Journal reported.
Within the past week, Twitter said it would layoff 30% of its talent acquisition team, GoPuff announced it would cut 10% of all employees and Meta’s head of engineering told managers to identify low performers for downsizing, according to the WSJ.
These cuts are the result of “slowing growth and fallout from other macroeconomic factors,” the WSJ added.
In a note to investors obtained by the WSJ, GoPuff noted that the job cuts are an attempt to prepare for “what could be a much more significant macroeconomic downturn than we are experiencing currently.”
The JCN poll surveyed 500 small business owners between June 4-28. The survey had a 95% confidence interval.
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