Small Business Confidence Climbs Four Points to 70.5 in Q3

Small business confidence rose four points to 70.5 in the third quarter of 2026, according to the latest Justworks and U.S. Chamber of Commerce Small Business Index, landing just below the record 72.0 recorded one year ago.

The survey, conducted online by Ipsos between August 4 and 18, 2026, among 759 small business owners and operators across the United States, paints a picture of businesses that feel strong about their own operations even as they doubt the broader economy. Seven in 10 respondents — 71% — describe their own business as being in good health. Only 27% say the same about the U.S. economy, down sharply from 40% a year ago.

The gap between self-assessment and national outlook is the defining feature of this quarter's data. Cash flow reinforces that split: 72% of small businesses report they are comfortable with their cash flow, and the share rating their health as "very good" climbed eight points to 35%.

"The small business economy remains remarkably steady," said Tom Sullivan, Senior Vice President of Small Business Policy at the U.S. Chamber of Commerce. "Owners are telling us their businesses are healthy, cash flow remains solid, and many continue to plan for growth. But they're also clear-eyed about the challenges ahead. Inflation continues to affect nearly every aspect of running a business, from payroll and benefits to long-term planning."

Inflation remains the most significant obstacle facing small businesses this quarter. It was cited by 54% of respondents, marking the third consecutive quarter in which at least half of those surveyed named it a top challenge.

Despite that pressure, forward-looking indicators moved higher. A total of 62% of small businesses expect revenue growth in the coming year. Meanwhile, 38% plan to increase investment and 36% expect to add staff.

"We're entering what we believe to be a golden age of entrepreneurship and small businesses," said Justworks CEO Mike Seckler. "While the headwinds can't be ignored, this report reinforces that there's real optimism among the small business community compared to the broader economy. As technology advances every day with AI, small businesses will continue to make an outsized impact on the economy, their customers, and their employees."

Benefits spending rises

The Q3 report also examines what small businesses are investing in their employees, and the numbers show a broad expansion of benefits coverage compared with last year. Seven in ten small businesses now offer at least one benefit to full-time employees.

The specific gains are substantial. Health insurance coverage rose to 46% from 41%. Paid vacation jumped to 40% from 30%. Dental and vision coverage climbed to 31% from 21%. Retirement plans reached 27%, up from 22%.

Those gains come despite real cost constraints. Rising costs (35%) and limited budgets (34%) were the most commonly cited barriers to offering benefits. And 67% of small businesses say they wish they had outside help selecting benefits.

The perceived payoff remains nearly universal. Nearly all small businesses agree that employee benefits are important for demonstrating care for employees (95%), retaining employees (94%), and attracting employees (89%).

"Inflation doesn't stay contained to the business side of the ledger; it follows employees home, showing up in their grocery bills, rent, and gas prices. When people are financially stretched outside of work, it shows up inside work too: more stress, less focus, and less capacity to bring their best selves to the job," said Stevie Straka, VP of people at Blumira, an Ann Arbor, Michigan-based IT security operations company that runs its business on Justworks.

A new partnership

This quarter marks the first release of the index under a new partnership between Justworks and the U.S. Chamber of Commerce. The collaboration combines the Chamber's leadership in small business research and advocacy with Justworks' experience serving more than 15,000 small businesses.

For employers and benefits providers, the report's signal is straightforward: small businesses are spending more on their people despite inflation, and two-thirds of them want help doing it. That demand for outside guidance on benefits selection may prove to be the more actionable number for the HR services market than the headline confidence score itself.