Inflation Supplants Labor as Top Concern for Small Businesses
Washington, DC, April 12, 2022-The NFIB Small Business Optimism Index decreased in March by 2.4 points to 93.2, the third consecutive month below the 48-year average of 98. Thirty-one percent of owners reported that inflation was the single most important problem in their business, up five points from February and the highest reading since the first quarter of 1981. Inflation has now replaced “labor quality” as the number one problem.
“Inflation has impacted small businesses throughout the country and is now their most important business problem,” said NFIB chief economist Bill Dunkelberg. “With inflation, an ongoing staffing shortage, and supply chain disruptions, small business owners remain pessimistic about their future business conditions.”
Key findings include:
* Owners expecting better business conditions over the next six months decreased 14 points to a net negative 49%, the lowest level recorded in the 48-year-old survey.
* Forty-seven percent of owners reported job openings that could not be filled, a decrease of one point from February.
* The net percent of owners raising average selling prices increased four points to a net 72% (seasonally adjusted), the highest reading in the survey’s history.
The net percent of owners raising average selling prices increased four points to a net 72% (seasonally adjusted), the highest reading recorded in the series. Unadjusted, three percent of owners reported lower average selling prices and 71% reported higher average prices.
Price hikes were the most frequent in wholesale (84% higher, 0% lower), construction (83% higher, 3% lower), agriculture (78% higher, 2% lower), and retail sales (77% higher, 2% lower). Seasonally adjusted, a net 50% of owners plan price hikes, up four points from February.
As reported in NFIB’s monthly jobs report, a net 20% of owners are planning to create new jobs in the next three months, up one point from February. The difficulty in filling open positions is particularly acute in the transportation, construction, and manufacturing sectors where many positions require skilled workers. Openings are lowest in the finance and agriculture sectors.