Q2-Q3 2025 Small Business Economic Report: An Analysis Through the Lens of Sustainable Development Goals

This report synthesizes recent data on the United States small business sector, evaluating current conditions and future outlooks against the framework of the United Nations Sustainable Development Goals (SDGs). The analysis highlights progress and challenges related to economic growth, employment, innovation, and inequality.

SDG 8: Decent Work and Economic Growth

The small business sector demonstrates a complex relationship with SDG 8, which promotes sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. While consumer spending provides a foundation for growth, significant challenges related to trade policy and hiring persist.

Business Confidence and Revenue Outlook

Overall confidence remains high, though it is tempered by external economic pressures. This optimism is crucial for driving the economic activity central to SDG 8.

• The Q2 MetLife & U.S. Chamber of Commerce Small Business Index shows 68% of small businesses are confident in their own health, and 73% are comfortable with their cash flow.
• According to the WSJ / Vistage survey, 56% of small businesses expect increased revenues in the next 12 months.
• The CNBC | SurveyMonkey Index (Q3) saw a significant jump in optimism, with 51% of owners expecting revenue to increase.
• The SBE Council survey found 76% of owners are confident in their financial prospects for the year.

Employment and Labor Market Dynamics

The labor market shows signs of slowing, posing a direct challenge to the “decent work for all” target of SDG 8. Difficulties in finding qualified applicants and a reduction in compensation growth indicate underlying friction.

• The NFIB July Jobs Report indicated a reversal of June’s hiring and compensation gains.
  • 57% of small businesses reported hiring or trying to hire, a 1-point decrease from June.
  • 33% reported job openings they could not fill, the lowest level in over four years, though still above the historical average.
  • Only 17% plan on raising compensation in the next 3 months, a 2-point decrease.
• Conversely, the MetLife & U.S. Chamber Index (Q2) reported that 42% of small businesses expect to increase staff in the next year, a 5-point increase from the previous quarter.

Challenges to Sustainable Growth: Tariffs and Inflation

External economic factors, particularly tariffs and inflation, threaten the stability and sustainability of small business growth, undermining the objectives of SDG 8.

• The U.S. Chamber of Commerce notes that tariffs have a “real and devastating impact,” creating uncertainty and raising costs.
• The WSJ / Vistage survey found 52% of business owners believe tariffs will have a negative impact on their business.
• Inflation remains the top concern for 48% of small business owners (MetLife & U.S. Chamber Index), marking the 14th consecutive quarter it has topped the list.
• The SBE Council survey reported that 73% of owners are concerned with tariffs, with 53% reporting a negative impact on operations.

SDG 9: Industry, Innovation, and Infrastructure

SDG 9 focuses on building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation. Small business investment in technology and R&D is a key indicator of progress toward this goal, though policy uncertainty creates headwinds.

Investment in Technology and Innovation

The adoption of new technologies like Artificial Intelligence (AI) signifies a commitment to innovation, a core component of SDG 9.

• The CNBC | SurveyMonkey Index found that 37% of small business owners use AI to help run their business.
• An equal percentage (37%) plan on increasing investment in AI over the next 12 months.
• Of those using AI, 75% cite a positive impact on their business.

Fixed Investment and R&D

Stalled growth in fixed investments and the need for supportive tax policy for R&D highlight areas where progress toward SDG 9 is being hindered.

• The WSJ / Vistage survey revealed that only 32% of small businesses are expecting to increase fixed investments, a 2-point decrease from June, signaling that uncertainty is stunting growth.
• The Goldman Sachs survey showed that 78% of small business owners want Congress to reinstate full and immediate research and development (R&D) expensing, a critical policy for fostering innovation.

SDG 10 & SDG 3: Reduced Inequalities & Good Health and Well-being

The provision of employee benefits and fair compensation are crucial levers for reducing inequalities (SDG 10) and promoting well-being (SDG 3). Data indicates that while many small businesses provide benefits, cost and complexity are significant barriers to broader adoption.

Employee Benefits and Welfare

Efforts to provide benefits like health insurance contribute directly to a healthier, more equitable workforce.

• The Q2 MetLife & U.S. Chamber Index reported that 70% of small employers offer at least one type of employee benefit, with health insurance being the most common.
• The primary barriers to providing more benefits were identified as costs and complexity.

Compensation Trends

Stagnating compensation growth poses a risk to reducing economic inequality and ensuring decent work as outlined in SDG 8 and SDG 10.

• The NFIB July Jobs Report showed that the percentage of small businesses that raised compensation dropped 6 points to 27%.
• The percentage planning to raise compensation in the next three months also fell by 2 points to 17%.

SDGs Addressed in the Article

SDG 8: Decent Work and Economic Growth

• The article’s primary focus is on the economic health and performance of small businesses, which are crucial drivers of economic growth and job creation. It extensively discusses business confidence, sales figures, revenue expectations, and employment trends, all of which are central to SDG 8.

SDG 9: Industry, Innovation, and Infrastructure

• The article touches upon technological advancement and innovation within small businesses. It specifically mentions the desire for R&D expensing and the adoption of artificial intelligence (AI) to improve business operations, which aligns with the goal of fostering innovation and upgrading technological capabilities.

SDG 17: Partnerships for the Goals

• The article highlights the significant impact of international trade policies, specifically tariffs, on small businesses. This connects to SDG 17’s emphasis on creating a stable, predictable, and equitable global trading system and ensuring policy coherence for sustainable development.

Identified SDG Targets

SDG 8: Decent Work and Economic Growth

1. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
   • The entire article is a “Small Business Weekly Data Snapshot” that analyzes the conditions affecting small businesses, from consumer spending and tax bills to tariffs and access to loans (“51% of small business owners believe that interest rates are too high to afford a loan”). This directly relates to monitoring the health and growth of small enterprises.
2. Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
   • The article provides detailed statistics on employment, such as hiring rates (“57% of small businesses reported hiring or trying to hire”), job openings (“33% of small businesses reported job openings they could not fill”), and compensation trends (“27% of small businesses raised compensation in July”), which are key measures of progress towards full and productive employment.

SDG 9: Industry, Innovation, and Infrastructure

1. Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries… encouraging innovation and substantially increasing the number of research and development workers…
   • This target is reflected in the survey data where “78% of small business owners want Congress to reinstate full and immediate research and development (R&D) expensing.” Furthermore, the adoption of new technology is highlighted: “37% of small business owners use artificial intelligence (AI) to help run or operate their business.”

SDG 17: Partnerships for the Goals

1. Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system…
   • The article repeatedly emphasizes the negative effects of tariffs on small businesses. Statements like “Tariffs are having a real and devastating impact on thousands of small businesses” and survey results showing “52% believe tariffs will have a negative impact” point to the need for stable and fair trade policies as advocated by this target.
2. Target 17.14: Enhance policy coherence for sustainable development.
   • The article illustrates a lack of policy coherence where positive domestic policies (like the tax bill) are counteracted by trade policies (tariffs). It notes that “Optimism among small businesses goes up after passage of the tax bill” but also that “uncertainty over tariffs remains and is reflected in a hiring slowdown,” showing how conflicting policies create uncertainty and stunt growth.

Implied Indicators for Measuring Progress

Indicators for SDG 8 (Targets 8.3 & 8.5)

• Annual growth rate of real GDP per employed person: Implied by data on sales and revenue, such as “year-over-year sales at small businesses rose 3.6% compared to July 2024” and “65% of small business owners expect to increase revenue in the next year.”
• Proportion of informal employment in non-agriculture employment: While not directly measured, the focus on small business health, compensation (“27% of small businesses raised compensation”), and benefits (“70% of small employers report offering at least one type of employee benefit”) are proxies for the quality and formality of employment.
• Unemployment rate: Implied by data on job openings and hiring challenges, such as “33% of small businesses reported job openings they could not fill” and “84% of those trying to hire reported few or no qualified applicants.”

Indicators for SDG 9 (Target 9.5)

• Research and development expenditure as a proportion of GDP: The article implies this through business sentiment, where “78% of small business owners want Congress to reinstate full and immediate research and development (R&D) expensing.”
• Proportion of medium and high-tech industry value added in total value added: The adoption of AI is a direct indicator of this. The article states, “37% of small business owners use artificial intelligence (AI) to help run or operate their business,” and an equal number plan to increase investment.

Indicators for SDG 17 (Target 17.10)

• Worldwide weighted tariff-average: The article provides perception-based indicators of the impact of tariffs, which is a direct consequence of this metric. For example, “53% reported negative impact on their operations from tariffs” and “40% of small business owners expect trade policy to have a negative impact on their businesses.”

Source: uschamber.com