One thing’s for sure: small businesses are definitely feeling optimistic.

Ever since Donald Trump took office in early 2017 there have been dozens of surveys reporting increased confidence among small business owners in the economy. Just last month the National Federation of Independent Businesses said that the confidence level of the small businesses it surveyed were at its second highest level in the 45-year history of their monthly index. A recent CNBC/SurveyMonkey survey also reported “record high” levels of small business confidence in July.

Now, the US Chamber of Commerce is weighing in. The chamber, which represents about 3 million businesses nationwide, publishes a quarterly Small Business Index with insurance firm MetLife. Its latest report, released last week, showed that almost 70% of small business owners have a positive outlook about their companies and the small business environment in the US. It’s the sixth consecutive quarter in a row that the report showed an increase and a jump of more than seven percentage points since the beginning of the year. (The US chamber is a client of my firm, The Marks Group, but I have received no compensation from them for this report.)

“Small business owners continue to tell us that they are confident in the national small business environment, and, just as encouraging, most have confidence in their local environments as well,” Jessica Moser, a senior vice-president at MetLife, said in their joint report. “This bodes well for the US economy, as small businesses are consistently an engine for growth all across the country: purchasing equipment and inventory, paying taxes, and employing ever-increasing numbers of individuals.”

Yes, this is good news for the economy. Small businesses employ about half of the workers in the country and their continued success means more growth and of course more jobs. But although the surveys say things are just fine, there are still significant challenges that concern many of us.

A strong economy has unfortunately revealed a gap in positions filled versus people available

For example, finding and keeping good people tops the list of our biggest problems this year. A strong economy has unfortunately revealed a gap in positions filled versus people available and that’s mostly due to two big factors: a significant amount of workers who lack skills and need training and a precipitous decline in immigrant workers who usually filled low-level jobs thanks to the tightening of immigration policies. The lack of a skilled workforce – or just available workers – has created an enormous headache for most of the clients I work with.

Healthcare costs, which are usually one of our biggest expenses, continue to rise at a double-digit pace throughout the country and many business owners are finding it difficult to control these costs while remaining competitive with their larger corporate counterparts. Changing workplace rules – and pressure from the still-active Equal Employment Opportunity Commission – as well as courts that are sympathetic to cases of employee discrimination are putting regulatory pressure on smaller companies. Besides a shortage of worker supply, the rising minimum wage in many states and the looming changes to federal overtime rules will also put more pressure on wages and margins over the next few years.

Access to capital also remains a big challenge for many. According to the Chamber/MetLife study, 71% of small business owners who reported that their operations are in good health indicated it was easy to obtain financing or credit. But only 40 percent of those in not good health indicate the same. In fact, those businesses that were in not good health were more likely to receive only a partial amount of the capital they needed (41%) or be rejected altogether (25%), than those in good health (10% percent and 8% percent, respectively). “We are moving in the right direction, but more policies that ease small businesses’ access to financing need to occur to ensure this vital sector of our economy continues to grow, create jobs, and positively impact communities across the country,” the chamber’s Tom Sullivan said.

Finally, both markets and the current trade environment are creating difficulties. Interest rates are rising and markets continue to be volatile, driven by unexpected comments from the White House and events overseas. Tariffs, duties and other fees related to recent disputes with China, Mexico, Canada and some of our other largest trading partners are adding new costs, generating uncertainty and making it harder for many small companies to sell their products overseas. Rising deficits in Washington are worrying many in the business community who fear that tax decreases won’t spur enough growth to offset increased spending and an unsustainable level of national debt.

So yes, business owners are confident and they should be. Considering the previous years of very stagnant growth along with an increased level of regulations and taxes, the pro-business direction of the new administration has been a relief. But given some of the significant and growing challenges facing both small and large businesses right now, it wouldn’t surprise me to see this confidence dampening in the quarters to come.

