Small Business Optimism Decline 1.4 Points to 95.7 in February

Washington, D.C., March 8, 2022-In February, the NFIB Optimism Index decreased by 1.4 points to 95.7, the second consecutive month below the 48-year average of 98. Twenty-six percent of owners reported that inflation was their single most important problem in operating their business, a four-point increase since December and the highest reading since the third quarter of 1981.

“Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February,” said NFIB chief economist Bill Dunkelberg. “Supply chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many.”

Key findings include:

* The net percent of owners raising average selling prices increased seven points to a net 68% (seasonally adjusted), a 48-year record high reading.

* Owners expecting better business conditions over the next six months decreased two points to a net negative 35%.

* Forty-eight percent of owners reported job openings that could not be filled, an increase of one point from January.

* Inventory accumulation plans fell one percentage point, following a five-point decline in January, following the massive inventory build in Q4.

Price raising activity over the past 12 months has continued to escalate, reaching levels not seen since the early 1980s when prices were rising at double-digit rates. Unadjusted, 4% of owners reported lower average selling prices and 68% reported higher average prices. Price hikes were the most frequent in retail (79% higher, 4% lower), wholesale (77% higher, 4% lower), construction (73% higher, 3% lower), and manufacturing (72% higher, 6% lower). Seasonally adjusted, a net 46% of owners plan price hikes.