Tag: small business optimism

Small business owners remain worried about the same things that top the monthly survey used to create the NFIB Small Business Optimism Index, which slipped 2.0 points in September to 98.8, the first drop in three months. Shortages of qualified employees, rising inflation, and supply chain disruptions led the list of challenges cited by business owners, who say they’re currently in good shape but are unsure of thier near-term outlooks.

While the survey, though it remains above its 52-year average of 98, the corresponding Uncertainty Index rose 7 points from August to 100, the fourth-highest reading in over 51 years.

“Optimism among small business owners decreased in September,” said NFIB Chief Economist Bill Dunkelberg in a press release. “While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”

Costs and supplies were prominent concerns, as inflation pushed the net percent of owners raising prices by 3 percentage points from August to a seasonally adjusted net 24 percent. Also, 14 percent of owners reported that inflation was their single most important problem, up 3 percentage points from August, while the 64 percent who reported that supply chain disruptions were affecting their business saw a 10 percentage point leap from the previous month. In a 5 percentage point monthly jump, 31 percent of business owners said they plan to increase prices over the next three months, up 5 points from August.

Some bright spots included owners reporting higher earnings in September, a 3 percentage point jump from August, and the highest level since December 2021. And while labor quality remained an issue, only 18 percent said it was their biggest problem, down from 21 percent the previous month.

Still, 32 percent of all small business owners reported job openings they could not fill in September, unchanged from August. The last time unfiled job openings fell below 32 percent was in July 2020. Of the 58 percent of owners hiring or trying to hire in September, 88 percent reported few or no qualified applicants for the positions they were trying to fill. A seasonally adjusted net 16 percent of owners plan to create new jobs in the next three months, up 1 point from August and the fourth consecutive monthly increase. Hiring plans are at their highest level since January.

Access to affordable capital got tougher in September, as 7 percent of owners reported that their last loan was harder to get than in previous attempts, up 4 points from August and the highest reading of the year. Furthermore, a net 7 percent reported paying a higher rate on their most recent loan and the average rate paid on short maturity loans was 8.8 percent in September, up 0.7 points from August. Twenty-six percent of all owners reported borrowing on a regular basis, up 3 points from August. Four percent reported that financing and interest rates was their top business problem in September, unchanged from August.

As national health care costs continue rising, 8 percent of owners reported the cost or availability of insurance as their single most important problem, down 1 percentage point from August.