Main Street Index | 2023 Business Trends & Industry Outlook​

Main Street Index

The Main Street Index (MSI) takes the pulse of and gauges the outlook for small and mid-sized businesses (SMBs) amid the current economic downturn. We share useful data and actionable resources for your organization to leverage.

Updated: September 19, 2023

SMBs Brace for Further Economic Decline with Cash Flow Concerns Top of Mind — Q3 2023 Results

Economic Expectations and Confidence

When asked if they are expecting a downturn in the economy, 67% of businesses responded “yes.” While down 6% from last quarter, this is clearly still a major concern that Main Street is preparing for. At the same time, general business confidence remains the same as Q2, with 49% of businesses feeling “confident” or “very confident.”

Further, 65% of businesses felt moderately to very confident that they have the cash flow sufficient to continue operations in the event of a down market or other market disruption. While this may seem positive, it still means that 35% have anywhere from “wavering to no confidence” that they’ll have sufficient cash flow; that would equate to a lot of struggling SMBs.

Business Confidence Over Time


Cash Flow Confidence

How confident are you that your business has the cash flow sufficient to continue operations in the event of a down market or other market disruption?

Sharp Increase in Higher Borrowing Costs

Forty-one percent of Main Street businesses reported they’re experiencing higher borrowing costs that are impacting their funding needs. That’s a sharp 14% increase from Q2 (27%).

Have you experienced higher borrowing costs?

Majority of SMBs Continue Price Increases

Over the last three months, nearly 57% of companies have made pricing increases due to inflation or inventory levels. This closely mirrors the data from Q2 (56%). While price increases continue, steep increases are mellowing. Just under 20% of companies raised prices for customers and vendors anywhere from one to four percent, up more than five percent from Q2. This may indicate a tapering down of dramatic pricing corrections to more of a steady inflationary pricing strategy.

What price changes have you made over the last 3 months due to inflation or inventory levels?

Top Main Street Concerns

What are your top concerns at this point in time?

Coming in only behind interest rate concerns (61.0%) and recessionary concerns (57.9%) are employee-related concerns: adequate number of skilled workers (50.3%) and employee retention (46.2%)This, in combination with an increase in employee turnover/resignation (54.5%), could be contributing to a recent concerning trend: over-hiring and workforce underutilization. Nearly 30% of companies indicated their workforce was not fully utilized. Over 20% are retaining their underutilized workforce to pit against possible future needs. 

Workforce management/utilization


Addressing Workforce Issues

Main Street Index businesses have experienced concerns about retaining employees amid a labor market that is experiencing steady hiring but also layoffs across many sectors. Some respondents also noted they are reducing staff and “doing more with less” while others mentioned cutting their unskilled workforce while incentivizing their specialized workforce to increase retention.


Percentage of Main Street Business Respondents Experiencing the Following Workforce Issues:
What is your organization doing to address workforce issues?

In response to these workforce issues, SMBs continue to primarily use the same three strategies: enhancing compensation and/or health/benefits packages, improving efficiency with technology and outsourcing.

Areas of Growth & Contraction on Main Street



Downturn Preparations

What are some adjustments you will or have made to your business in preparation for a downturn in the economy?


Revenue Expectations

What are your revenue expectations over the next 3 months?


Loan Planning

Is your business planning to refinance a business mortgage or loan over the next 6 months?