Community bankers have a number of concerns about the future, but inflation topped the list of anxieties that includes cyberattacks, government regulation and the cost and availability of labor, surpassing cybersecurity and overregulation for the first time.
Inflation hit a 41-year high in the first quarter, rising to 8.5 percent from a year ago, as the headline consumer price index went up 8.6 percent. As a result, it comes as no surprise that inflation is the top concern in the CSBS first quarter 2022 Community Bank Sentiment Index (CBSI).
Community bankers are not alone in their concern. In a recent survey of small business owners, 56 percent indicated a belief that the economy has worsened since January. Survey data from Goldman Sachs’s 10,00 Small Business Voices program, indicates that:
- 73 percent of small business owners said energy prices were having a negative effect on their business;
- 60 percent have passed higher costs on to consumers by raising prices; and
- Just 5 percent believe inflation and supply chain challenges will subside in the next six months.
While inflation concerns increased substantially in the Goldman Sachs survey data, the number one cause of concern for small businesses remained, “difficulty finding and retaining qualified employees.” This echoes the sentiments heard from bankers across the state of Texas throughout IBAT’s 2022 Tour de Texas.