January 2025 Small Business Data Outlook: Signs of Strength at Start of 2025

Summary: Headwinds of worker shortages remain strong and are a barrier for growth on Main Street.

• 35% of small businesses reported job openings they could not fill in December (1 point lower than November).
• 55% of small businesses hired or tried to hire in December (no change from November).  Of those hiring, 89% of those hiring reported few or no qualified job applicants (up 2 points from November).
• 19% of small business owners are planning to create new jobs in the next 3-months (1 point higher than November).
• 29% of small businesses raised wages in December (down 3 points from November) and 24% plan on raising compensation in the next 3 months (down 4 points from November’s highest reading of last year).
• 29% of small businesses have openings for skilled workers (1 point lower than November) and 13% have openings for unskilled labor (unchanged).
• 41% of small businesses in construction have a job opening they can’t fill (13 points lower than November).

Learn more about this data from National Federation of Independent Business (NFIB) Jobs Report, published on Jan. 9, 2025.

Summary: While small business owners are bullish for 2025, workforce shortage challenges threaten to keep costs high.

• 66% of small business owners are predicting higher sales in 2025.
• 64% are investing in increased sales by adding products (35%), increasing advertisement spend (34%), and increasing social media campaigns (31%).
• Nearly 80% of small business owners are either already implementing artificial intelligence (AI) or considering adopting AI this year.
• 60% of small business owners are optimistic about the local economy (up 3 points from the mid-year report) and 69% of small businesses are not expecting a recession in 2025.
• 40% of small business owners say they are facing labor shortage challenges, including recruiting and retaining quality employees.
• 47% plan on increasing wages to be competitive in the labor market.  40% are offering flexible working arrangements. And, 35% plan on increasing benefits such as healthcare, 401(k)s, and child care.
• 59% of small business owners view wages as their most significant cost driver and 56% have raised prices to try and offset increased costs.

Learn more about this data from JPMorganChase 2025 Business Leaders Outlook, published on Jan. 7, 2025.

Summary: Small business owners’ plans to hire additional staff continue to rise.

• 37% of small business owners say the economy has improved (9 points higher than November) and 20% say the economy has gotten worse (8 points better than November).
• 59% of small business owners believe the economy will improve in the next 12 months (4 points lower than November’s massive 27 point one-month-jump) and 13% believe the economy will worsen (no change from November).
• 71% of small businesses plan on increasing employees next year (7 points higher than November) and 23% plan on shrinking their workforce (1 point lower than November).
• 43% of small businesses expect to increase fixed investments in the next year (2 points lower than November).
• 80% of small businesses expect increased revenues in the next 12 months (1 point higher than November) and 67% believe profitability will improve (2 points lower than November).
• 66% of small business owners rank “tax policies” as the most likely to impact their business (15 points higher than November) within a list of anticipated policy priorities of the new Administration.
• 27% report an increase and 4% report a decrease in demand since the election.

Learn more about this data from WSJ / Vistage Small Business CEO Confidence Index, published on Jan. 6, 2025.

Summary: January small business data reports discovered that holiday spending boosted small business sales to end the year.

• Year-over-year sales at small businesses rose 4.9% compared to December 2023.
• Sales at General Merchandise retailers was strong compared to November (+3.1%) and really strong compared to December 2023 (+14.4%).
• Sales at Restaurants were down compared to November -1.6% and down compared to December 2023 -3.4%.
• North Dakota claimed the state throne for month-over-month sales (+7.7%) combined with steady year-over-year growth (9.6%).

Learn more about this data from Fiserv Small Business Index, published on Jan. 2, 2025.