(This column originally appeared in the Philadelphia Inquirer)
There’s been a lot of speculating how President Donald Trump ‘s economic policies will impact the nation’s small businesses.
But what about now? There are 33 million small businesses in this country, with about more than a million in Pennsylvania. Given these numbers, it’s difficult to generalize how every small business is doing. But some recent data points give us a good indication of their optimism, confidence, activity, and employment — both nationally and in the area.
The National Federation of Independent Business’ (NFIB) Small Business Optimism Index declined in March to fall just below its 51-year average, and its Uncertainty Index reached its second highest ever reading.
“The implementation of new policy priorities has heightened the level of uncertainty among small-business owners over the past few months,” said the NFIB’s chief economist Bill Dunkelberg, who is also dean of Temple University ‘s Fox School of Business. “Small-business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them.”
In its quarterly Small Business Index survey, the U.S. Chamber of Commerce also reported a dip in confidence, and the number of small-business owners who said they were concerned about their revenues and uncertainty reached its highest level since 2021. The chamber’s overall score, a measure of small-business confidence, fell back to where sentiment stood a year ago.
Even with confidence falling, almost two-thirds of small businesses asked by the NFIB said that the financial health of their businesses remained “excellent” or “good,” and the U.S. Chamber survey found that despite the drop in confidence, views of the U.S. economy and local economies remained stable among their respondents.
Global payments and financial services firm Fiserv found in its March Small Business Index that the point-of-sale transaction data from two million U.S. small businesses showed a “notable acceleration” of small-retailer sales in February, with growth driven by “strong demand for services and increasing restaurant foot traffic.” Sales rose 5.5% and “continued to show healthy growth.”
In its most recent “Beige Book” report, the Federal Reserve of Philadelphia found that business activity through January in the region declined slightly but that retailers reported little or no change in consumer spending on balance.
Manufacturing in the region decreased in March but was still above market conditions, with 31% of firms reporting increases in activity and 47% saying there was no change. The Philly Fed also said that non-manufacturing activity decreased slightly and that “non-manufacturers were less optimistic than manufacturers.”
According to the Intuit QuickBooks Small Business Index — which uses data from hundreds of thousands of QuickBooks customers with less than nine employees — the average real monthly revenue for U.S. small businesses in February decreased 0.79% from the month before. However, Pennsylvania businesses saw their revenues increase 1.4%.
Fiserv reported that Philadelphia retailers and restaurants were among the leaders of the largest cities showing year over year sales growth.
Around seven in 10 small businesses in this region said that their business is in “good health” or that they are “comfortable” with their cash flow, according to the U.S. Chamber survey. The survey also found that small businesses in this region are more likely than those in the Midwest or West to say that the U.S. economy is in good health (39% vs. 22% and 25%, respectively).
According to the Intuit QuickBooks index, employment for U.S. small businesses with one to nine employees in February decreased by 0.99% compared to the previous month. Pennsylvania’s employment was consistent with the national average, falling exactly 1%.
But the Philly Fed said its employment index increased to 19.7, its highest since October 2022 although “firms were more reluctant to hire amid economic uncertainty.”
The Paychex Small Business Employment Watch, which uses data from its customers having less than 50 employees, showed job growth continuing at levels seen over the last several quarters. Pennsylvania’s index was 99.68 in March 2025 compared to 100.34 a year ago.
“According to our most recent data, the small-business labor market is fundamentally healthy and showing no current signs of a recession,” said John Gibson, Paychex president and CEO. “Job growth within U.S. small businesses continues at levels we have seen over the last several quarters, while wage growth has remained below three percent for the fifth-straight month.”
“The data is clear, confidence is being shaken as small businesses increasingly worry about their revenue while at the same time confronting the possibility that tariffs will raise costs for them and their employees,” said Tom Sullivan, vice president of small-business policy at the U.S. Chamber of Commerce. “But while measures related to revenue and cash flow dipped, other underlying indicators such as hiring plans, investment plans, and overall confidence in the economy remain strong. The prospect of tax and regulatory relief may be buoying optimism amid uncertainty.”
Philadelphia area’s Mark Zandi, who is the chief economist at Moody’s, is not as optimistic.
“I still put the odds of a recession this year at 60%,” Zandi recently posted on X (formerly Twitter). “The 125% tariffs on China, 10% on most other countries and 25% on autos, steel and aluminum put the overall effective tariff rate at more than 20% on a static basis. It hasn’t changed. And, as it is clear that U.S. trade policy is being made up on the fly, it generates lots of drama and uncertainty, which is another heavy weight on the economy.”
And it’s not just tariffs. If you’re running a small business in the Philadelphia area, you’re facing a year of tax, federal spending, and regulatory disruption.
It’s likely that uncertainty will increase and confidence will fall, at least in the short term.
