88% of Small Business Owners Hurt by Supply Chain Disruptions

US President Joe Biden speaks during a meeting with business leaders and CEOs on the need to address the debt limit, on October 6, 2021, in the South Auditorium of the White House in Washington, DC. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)
NICHOLAS KAMM/AFP via Getty Images

The optimism of U.S. small-business owners took a bigger than expected hit in September amid ongoing labor shortages and supply chain disruptions.

The National Federation of Independent Business optimism index decreased by 1 point to 99.1, the worst rating since March. The median forecast of analysts polled by Marketwatch was for the index to drop by one-tenth of a point from August’s 100.1.

Five of the ten components of the index declined, three improved, and two were unchanged.

“Small business owners are doing their best to meet the needs of customers, but are unable to hire workers or receive the needed supplies and inventories,” NFIB chief economist Bill Dunkelberg said.

Over 35 percent of owners report supply chain disruptions have had a significant impact on their businesses. Another 32 percent say supply chain disruptions have had a moderate impact, and 21 percent report a mild impact. Only 10 percent of owners report no impact.

Owners are particularly pessimistic about business conditions over the next six months. The index component measuring this fell five points to a net negative 33 percent.

The shares of owners planning to make capital outlays fell to 53 percent, which the NFIB said is historically a weak reading. Three percent of owners reported high sales in the past three months, up three points from August.  A net two percent expect high sales in the next three months.

Plans to create jobs in the next three months fell six points but this measure remains at a high level. Fifty-one percent of owners reported they had job openings they could not fill.

“The outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations,” Dunkelberg said.

The net share of owners raising average selling prices fell three points to 46 percent. Eight percent of owners reported lower selling prices and 53 percent reported higher prices. Price hikes were most common in wholesale, with 75 percent reporting higher prices. Sixty-seven percent of manufacturers reported higher prices and 71 percent of retail owners reported price hikes. A seasonally adjusted 46 percent of owners are planning to hike prices.

 

 

.

Please let us know if you're having issues with commenting.