“Inflation has now replaced “labor quality” as the number one problem.” National Federation of Independent Business
The National Federation of Independent Business (NFIB) Small Business Optimism Index decreased in March by 2.4 points to 93.2, the third consecutive month below the 48-year average of 98.
Thirty-one percent (31%) of small business owners reported that “inflation was the single most important problem in their business, up five points from February and the highest reading since the first quarter of 1981”. Inflation has now replaced “labor quality” as the number one problem.
“Inflation has impacted small businesses throughout the country and is now their most important business problem,” said NFIB Chief Economist Bill Dunkelberg. “With inflation, an ongoing staffing shortage, and supply chain disruptions, small business owners remain pessimistic about their future business conditions.”
Key NFIB findings include:
- Owners expecting better business conditions over the next six months decreased 14 points to a net negative 49%, the lowest level recorded in the 48-year-old survey.
- Forty-seven percent of owners reported job openings that could not be filled, a decrease of one point from February.
- The net percent of owners raising average selling prices increased four points to a net 72% (seasonally adjusted), the highest reading in the survey’s history.
- The net percent of owners raising average selling prices increased four points to a net 72% (seasonally adjusted), the highest reading recorded in the series.
The difficulty in filling open positions is particularly acute in the transportation, construction, and manufacturing sectors where many positions require skilled workers. Openings are lowest in the finance and agriculture sectors.
Eight percent of owners cited labor costs as their top business problem and 22% said that labor quality was their top business problem, now in second place following “inflation.”
Forty percent of owners report that supply chain disruptions have had a significant impact on their business, up three points. Another 28% report a moderate impact and 23% report a mild impact. Only 8% report no impact from recent supply chain disruptions.
References:
- https://www.nfib.com/content/press-release/economy/inflation-overtakes-labor-quality-as-top-business-problem-for-small-businesses/ (Inflation Overtakes Labor Quality as Top Business Problem For Small Businesses)
- https://www.nfib.com/small-business-survival/
The National Federation of Independent Business (NFIB) is the voice of small business and advocates on behalf of America’s small and independent business owners. NFIB is nonprofit, nonpartisan, and member-driven.