NFIB Research Center Executive Director Holly Wade appeared on Bloomberg: The Close to discuss the recent findings from the Small Business Optimism Index and how these are influencing Main Street businesses.
Wade addressed the results of NFIB’s September Small Business Economic Trends (SBET) survey, noting a two-point drop in optimism among small business owners. She said, “As you mentioned, our headline measure of the small business economy, our Optimism Index, shed two points. And that was though from the second-highest level or second-highest reading of the year, the highest reading being back in January. So, that two-point decline is certainly of concern, still in a fairly okay position. It remains above the 52-year average for the Index, but that decline did showcase some hesitation of small business owners. More were saying that they feared that business conditions will worsen than get better over the next six months, and there were more respondents saying that current inventories are too high. And so those two components including the elevated level of uncertainty are what we’re paying attention to at NFIB.”
She further explained that while inflation concerns have increased among small business owners—reflected by higher numbers reporting price increases and plans for future price hikes—the primary challenge remains labor-related issues. According to Wade: “You know, we saw an increase in those saying that [inflation is] their single most important problem in operating their business. And we also saw that the two price questions that we have included in our questionnaire, price, actual price increases and price plans both were above the August numbers. And so, both of those are elevated. The number [of business owners] saying that it’s their biggest problem has increased. But still when asking the population of small business owners in our survey about their single most important problem, it continues to be labor. So, whether it’s labor quality or the cost of labor, that’s around 29%, including both of those in a bucket. Labor is their biggest issue going forward. So, while inflation is climbing up a bit, labor is the biggest issue for most small business owners.”
The latest survey highlights ongoing uncertainty among small businesses regarding future economic conditions and inventory levels.
