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Supply chain issues, inflationary pressures lowering small business optimism
Small business optimism fell in September as supply chain issues, inflation, and hiring challenges weigh on confidence, according to the NFIB report. PHOTO/GETTY IMAGES
Supply chain issues, inflationary pressures lowering small business optimism
Is optimism fading among small business owners?
The NFIB Small Business Optimism Index declined two points in September to 98.8.
According to the NFIB, this was the first decline in three months, though it remains above the survey’s 52-year average of 98.
The Uncertainty Index rose seven points from August to 100, the fourth-highest reading in over 51 years.
NFIB Pennsylvania State Director Greg Moreland commented on the decline.
“Supply chain disruptions, ongoing hiring challenges, and rising inflationary pressures have left Pennsylvania small business owners feeling less optimistic,” Moreland said. “Despite these obstacles, our members are committed to meeting their customers’ demands and earning their business.”
In September, 18% of small business owners cited labor quality as their single most important problem, down three points from August and tying with taxes as the top single most important problem.
The NFIB said that supply chain and inflation issues stood out as a key problem in the report.
The net percentage of owners raising average selling prices rose three points from August to a net 24%. A net 31% plan to increase prices over the next three months, up five points from August.
Fourteen percent of owners reported that inflation was their single most important problem in operating their business, up three points from August.
In September, 64% of small business owners reported that supply chain disruptions were affecting their business to some degree, up 10 points from August.
One bright spot was actual earnings changes — the net percentage of owners reporting higher vs. lower profits — which increased three points in September, up to its highest level since December 2021.
However, the net percentage of owners expecting better business conditions fell 11 points from August to 23%.
Small business owners’ overall assessment of their business’ health was generally unchanged. When asked to rate the overall health of their business, 11% of owners reported excellent — down three points — and 57% reported good — up 3 points. Twenty-seven percent reported the health of their business was fair, and 4% reported poor.
