Small Business Inflation Worries Highest Since 1979
According to a investigation by the National Federation of Independent Business (NFIB).
Thirty-seven percent of small business owners said inflation was their biggest problem running their businesses, up three points from June and the highest level since the fourth quarter of 1979.
Overall, the NFIB’s Small Business Optimism Index rose to 89.9, marking the sixth consecutive month below the 98-year average of 98. The reading was above estimates for a reading of 89 and slightly above June’s reading of 89.5. Owners expecting better business conditions over the next six months rose nine points from June’s record high to a negative net result of 52%. Expectations of improved trading conditions deteriorated every month from January to June this year.
Thirty-two percent of owners said supply chain disruptions had a significant impact on their business. Another 36% report moderate impact and 23% report mild impact. Only 9% reported no impact from recent supply chain disruptions.
Thirty-seven percent of owners said they plan to raise prices, while 29% expect their sales to be higher, down one point from June. Of owners reporting lower profits, 40% blamed rising material costs, 17% blamed lower sales, 10% cited labor costs, and 2% cited taxes and fees. higher regulatory costs.
“There are more than 20 million small businesses in the United States, employing more than 60 million workers, roughly half of the nation’s workforce, and accounting for more than 40% of economic activity. If small business optimism continues to wane, they will be among the first to cut spending and headcount,” said Caleb Silver, editor of Investopedia.
NFIB.