Detroit, January 23, 2026
As Detroit’s small business sector enters the new year, there is cautious optimism amid persistent challenges such as labor shortages and inflation. A recent survey reveals that while some business owners expect economic improvement, many continue to struggle with hiring qualified employees and dealing with rising costs. Despite these hurdles, a notable percentage of businesses are planning to raise compensation and anticipate revenue growth, indicating some positive trends in the local economy.
Detroit, Michigan – January 23, 2026
Detroit’s small business sector enters 2026 with cautious optimism, facing challenges such as labor shortages and inflation concerns.
Economic Outlook
- 24% of small business owners expect the economy to improve in the next 3 months, a 9-point increase from November 2025.
- 13% believe it is a good time to expand their business, unchanged from previous months.
- 10% anticipate higher sales in the next 3 months, a 5-point decrease from November 2025.
Labor Market Challenges
- 33% of small businesses reported unfilled job openings, with 91% of those attempting to hire facing few or no qualified applicants, a 2-point increase from November 2025.
- 53% of small businesses hired or attempted to hire in October 2025, a 3-point decrease from November 2025.
- 17% plan to hire in the next 3 months, a 2-point decrease from November 2025.
Inflation and Compensation
- 12% of small businesses listed inflation as their top concern, a 3-point decrease from November 2025.
- 31% raised compensation in the past 3 months, a 5-point increase from November 2025.
- 24% plan to raise compensation in the next 3 months, unchanged from November 2025.
Pricing and Capital Expenditures
- 30% of small businesses increased prices, a 4-point decrease from November 2025.
- 28% plan to raise prices in the next 3 months, a 2-point decrease from November 2025.
- 56% reported capital outlays in the last 6 months, a 4-point increase from November 2025.
- 19% plan capital purchases in the next 3 months, a 1-point decrease from November 2025.
Credit Conditions and Borrowing
- -5% of small business owners expect better credit conditions in the next 3 months, unchanged from November 2025.
- The average rate for short-term loans was 8.4%, a 0.5-point increase from November 2025.
- 25% of small business owners report borrowing on a regular basis, a 2-point increase from November 2025.
National Perspective
- 74% of small business owners are optimistic about the upcoming year, a 1-point decrease from last year.
- 76% expect revenue growth, a 2-point increase from last year.
- 76% anticipate higher profits, a 2-point increase from last year.
- 54% plan to hire more employees, a 2-point decrease from last year.
- 38% anticipate that tariffs will hurt their businesses in 2026, while 26% believe tariffs will help.
- 43% of respondents in San Francisco believe tariffs will have no impact on their small businesses in 2026, compared to 29% of all respondents.
Consumer Spending
- Month-over-month sales at small businesses increased slightly in December 2025, following a dip in November.
- Year-over-year sales rose by 1.6% compared to December 2024.
Conclusion
Detroit’s small business community remains cautiously optimistic as it navigates challenges like labor shortages and inflation. While there is a positive outlook for the economy and revenue growth, concerns persist regarding hiring difficulties and rising costs. Continued adaptation and strategic planning will be essential for small businesses to thrive in the evolving economic landscape.
Frequently Asked Questions (FAQ)
What percentage of small business owners in Detroit expect the economy to improve in the next 3 months?
24% of small business owners expect the economy to improve in the next 3 months, a 9-point increase from November 2025.
How many small businesses in Detroit reported unfilled job openings?
33% of small businesses reported unfilled job openings, with 91% of those attempting to hire facing few or no qualified applicants, a 2-point increase from November 2025.
What is the average rate for short-term loans for small businesses in Detroit?
The average rate for short-term loans was 8.4%, a 0.5-point increase from November 2025.
How did consumer spending affect small business sales in Detroit in December 2025?
Month-over-month sales at small businesses increased slightly in December 2025, following a dip in November. Year-over-year sales rose by 1.6% compared to December 2024.
What are the top concerns for small businesses in Detroit as they enter 2026?
Top concerns include labor shortages, with 33% of small businesses reporting unfilled job openings, and inflation, with 12% listing it as their top concern, a 3-point decrease from November 2025.
Key Features of the Detroit Small Business Outlook
| Feature | Details |
|---|---|
| Economic Outlook | 24% of small business owners expect the economy to improve in the next 3 months, a 9-point increase from November 2025. |
| Labor Market Challenges | 33% of small businesses reported unfilled job openings, with 91% of those attempting to hire facing few or no qualified applicants, a 2-point increase from November 2025. |
| Inflation and Compensation | 12% of small businesses listed inflation as their top concern, a 3-point decrease from November 2025. 31% raised compensation in the past 3 months, a 5-point increase from November 2025. |
| Pricing and Capital Expenditures | 30% of small businesses increased prices, a 4-point decrease from November 2025. 56% reported capital outlays in the last 6 months, a 4-point increase from November 2025. |
| Credit Conditions and Borrowing | -5% of small business owners expect better credit conditions in the next 3 months, unchanged from November 2025. The average rate for short-term loans was 8.4%, a 0.5-point increase from November 2025. |
| National Perspective | 74% of small business owners are optimistic about the upcoming year, a 1-point decrease from last year. 76% expect revenue growth, a 2-point increase from last year. |
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DETROIT STAFF WRITER The DETROIT STAFF WRITER represents the experienced team at HEREDetroitMI.com, your go-to source for actionable local news and information in Detroit, Wayne County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Movement Electronic Music Festival, Detroit Grand Prix, and America's Thanksgiving Parade. Our coverage extends to key organizations like the Detroit Regional Chamber and Focus HOPE, plus leading businesses in automotive and healthcare that power the local economy such as General Motors, Ford Motor Company, and Henry Ford Health. As part of the broader HERE network, including HEREGrandRapids.com, HERENorthville.com, HERENovi.com, and HEREPlymouth.com, we provide comprehensive, credible insights into Michigan's dynamic landscape.
