Inflation, Supply Chain, and Labor Shortages Among Top Concerns for U.S. Business: Umpqua Bank

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Optimism is down among U.S. business owners and executives as the country transitions into a late-stage pandemic economy. According to Umpqua Bank’s 2022 Business Barometer report, only 34% of businesses rate economic conditions in the U.S. as good or excellent. That’s down from 41% last year. And 34% rated economic conditions as poor, up from 18% last year. 

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Inflation, supply chain concerns, and hiring challenges are top-of-mind for the 1,200 survey respondents. Businesses reported a more cautious economic outlook in 2022 compared to previous years. Just under a quarter (24%) think conditions will improve, down from 52% last year. 

Despite these findings, businesses remain resilient. More than half (52%) expect revenue to grow in the next year and 32% expect it to stay stable. That being said, price increases are expected, with over two-thirds (69%) anticipating raising prices. This is due to increased costs for goods, services, fuel, and wages. Small businesses are significantly more likely than their middle market counterparts to raise prices in the coming year, with just under three-quarters (74%) anticipating this as opposed to 45% of the middle market.

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More than half of all companies (56%) are having trouble finding qualified employees. The top workforce issues are:

  • A shortage of candidates with the skills they need (42%)
  • Problems finding candidates willing to work at the wages offered (31%)
  • Challenges engaging quality talent (29%)

Additionally, supply challenges persist even though the availability of goods has improved. The majority of companies face increased prices and delays in getting goods purchased.