Small business optimism on a national scale, according to one major monthly survey, remains subpar.
This comes from the NFIB's Small Business Optimism Index. It decreased 0.6 of a point in August to 91.3. That's the 20th consecutive month below the 49-year average of 98.
The main culprit in the decline in optimism remains inflation: nearly one-fourth, 23%, of small business owners reported inflation was their single most important business problem, up two points from last month. The net percent of owners raising average selling prices, the report found, increased two points to a net 27% (seasonally adjusted), still at an inflationary level.
Nearly one-fourth of respondents, meanwhile, 24%, say labor quality was their top business problem.
“With small business owners’ views about future sales growth and business conditions discouraging, owners want to hire and make money now from strong consumer spending,” NFIB Chief Economist Bill Dunkelberg says in a statement. “Inflation and the worker shortage continue to be the biggest obstacles for Main Street.”
“Higher prices and a lack of qualified job candidates are affecting small businesses from the Panhandle to the Keys," NFIB Florida Executive Director Bill Herrle adds, "and those factors almost certainly are going to impact the physical recovery along the path of Hurricane Idalia.”
Findings of the survey include:
- Small business owners expecting better business conditions over the next six months dropped seven points from July to a net negative 37%. That's 24 percentage points better than last June’s reading of a net negative 61%, but still at recession levels.
- Four in 10 owners reported job openings that were hard to fill. That's down two points from July, yet historically high. In a bit of a counterintuitive move, owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 17% planning to create new jobs in the next three months.
- The net percent of owners who expect real sales to be higher decreased two points from July to a net negative 14%.
- More than half, 56%, reported capital outlays in the last six months, up one point from July. Of those making expenditures, 37% reported spending on new equipment; 24% acquired vehicles; and 17% improved or expanded facilities. Nearly one-fourth, 24%, of owners plan capital outlays in the next few months, down three points from July.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership.