Small business economic sentiments improved in September but remained below average amid inflation and ongoing concerns over a potential recession, according to the National Federation of Independent Business.
The index for small business optimism dropped a half-point to 90.8, below its 49-year average of 98. Twenty-three percent of owners cited inflation as the most pressing issue in operating their business, unchanged from August and tied with labor quality as their top concern.
The share of small business owners expecting business conditions to improve over the next six months fell six points to a net-negative 43 percent. The reading, which indicates recessionary sentiments, is still 18 percentage points better than last June.
“Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy,” said NFIB Chief Economist Bill Dunkelberg. “Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.”
Forty-three percent of owners had job openings that were hard to fill, up three percent from August as owners struggled to hire enough workers due to a shortage of qualified workers.
A net 23 percent expect to raise compensation in the next three months, down three percent from August. A net 18 percent planned to create jobs in the next three months.
Other report findings included:
- Fifty-seven percent of owners made capital outlays in the last six months. Of those, 41 percent invested in new equipment, 22 percent acquired vehicles and 17 percent improved or expanded facilities.
- A net negative 8 percent reported higher nominal sales in the past three months, up six points from August’s two-year low. The net percent of owners who expect real estate volumes to grow increased one point to a net negative 13 percent.