Small business optimism remains low over inflation, worker shortage

Small business optimism remained below average in September as owners continued to battle inflation and worker shortages, according to the National Federation of Independent Business

The NFIB Small Business Optimism Index increased 0.3 points in September to 92.1, the ninth straight month that the reading has fallen below the 48-year average of 98. Thirty percent of owners said inflation remains the top problem they face in running their businesses. More than half said they had increased their average selling prices.

 Small businesses continued facing challenges in finding employees, especially in transportation, manufacturing and construction sectors. According to the NFIB, 46 percent of owners said job openings were hard to fill, down three points from August. Forty-two percent have skilled worker openings. Though many said they plan to fill open positions, 57 percent reported few or no qualified applicants. The current level of job openings is 20 percentage points higher than average.

Sixty-six percent of owners said supply chain disruptions have had either a significant or moderate impact on their businesses. The number of owners expecting business conditions to improve over the next six months fell two points from September to a net negative 44 percent. 

“A more positive view of the future economy and economic policy would help stimulate longer-term investment spending, but currently, owners’ views about the future are not supportive,” said Chief Economist Bill Dunkelberg and NFIB Research Center Executive Director Holly Wade. “Investment is needed to address labor supply chain problems in the current environment. In addition, Federal Reserve actions will continue to raise interest rates, increasing the cost of financing capital projects and reducing the expected gains from investments.” 

Fifty-six percent of small business owners reported making capital outlays over the last six months, up four points from August. Approximately one-in-four are planning capital outlays in the next six months. A net negative 5 percent of owners reported higher nominal sales over the last three months, up three points from August.