US Small Business Owners Have ‘Dismal View’ of Future as Inflation Woes Continue: NFIB

A pedestrian passes a "Help Wanted" sign in the door of a hardware store in Cambridge, Massachusetts, on July 8, 2022. Brian Snyder/Reuters

Optimism among America’s small business owners fell last month, with many of them deeply concerned about the negative effects of inflation, according to the National Federation of Independent Business (NFIB).

The NFIB’s Small Business Optimism Index fell 0.8 points to 91.3 in October, which is the 10th straight month the index has remained below the 49-year average of 98, according to a Nov. 8 press release. Owners who expect business conditions to improve over the next six months declined two points to a net negative 46 percent. The net percent of owners expecting real sales to climb higher fell by three points to a net negative 13 percent.

Inflation was cited as the single most important operational problem by 33 percent of owners, which is three points higher than in the previous month. It is also only four points lower than the July reading, which was the highest since Q4 1979.

Among survey respondents, 46 percent found it difficult to fill their job openings. Among owners hiring or trying to hire, 90 percent reported that they found few or no qualified candidates to fill the posts.

“Owners continue to show a dismal view about future sales growth and business conditions, but are still looking to hire new workers,” said NFIB Chief Economist Bill Dunkelberg, according to the release.

“Inflation, supply chain disruptions, and labor shortages continue to limit the ability of many small businesses to meet the demand for their products and services.”

While 31 percent admitted that supply chain disruptions have had a “significant impact” on their business, 31 percent said they only had a “moderate impact,” while 27 percent felt the impact was only “mild.”

Rent Delinquency, Election Issue

According to an analysis by small business referral network Alignable, the rent delinquency rate among small businesses rose by 7 percent in October, which is the “largest, most rapid increase in 2022.”

In September, only 30 percent of owners were unable to pay their rent in full and on time, a figure that rose to 37 percent in October.

One factor cited by the businesses for rent delinquency is the cumulative, negative impact of more than a year of elevated inflation that has absorbed most of the gains in sales. Increases in supply chain costs, high gas prices, and rising labor shortages and expenses are some of the other factors.

In an interview with Fox, a spokesperson from the U.S. Chamber of Commerce pointed out that small business owners are worried about burdensome regulations.

Speaking to the outlet, NFIB spokesman Jon Thompson cited the recent expansion of the IRS and concerns about potential tax hikes as additional regulatory issues.

“This Election Day, small business owners and employees are energized and motivated to cast their ballot for candidates who will stand up for Main Street and enact pro-small business policies,” he said ahead of the polls.